State of the Printing and Paper Markets
Another difference today: when demand increases, there won't be excess surplus to make a smooth and gradual increase in the market. Paper prices will increase as fast as the mills can get away with it, because demand will be greater than surplus.
Then there are the printers. Even though you hear printers complain about how they've been devastated, in many ways, they've faired well. By increasing efficiencies, decreasing staff, lowering their cost of business, and shutting down inefficient plants, they've managed to survive.
But they don't need to merely survive, and they're not non-profit businesses, so expect printing prices to increase as well. However, unlike the paper industry, increases in printing prices will be directly related to demand. Printers have a lot of capacity to sell before they hit the maximum levels of four years ago.
We will continue to see affordable pricing and attractive incentives throughout 2004. Even though rates might increase, by the end of the year we should have pricing that is much lower than what publishers were paying in 1999 and 2000.
If you negotiated your printing agreement prior to September 2001, you'll probably find better prices, and actually see costs decrease. However, if you've negotiated after that date, you've probably already realized the lower prices that the market offered, and this year might offer minimal if any gains.
What should you be prepared for this year? Definitely higher paper prices. To be safe, budget anywhere from 5% to 10% more than 2003. Printing costs will remain stable or increase slightly, but deals can be found. Considering we're all paying far less than we did for both paper and printing than in 1984, we should count our blessings. When ad pages come back and costs go up, they'll still be less than they were 20 years ago.