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Q3 Questionnaire Analysis – Oct 2009

November 2, 2009

To more accurately reflect this informal review we have decided to rename it a Questionnaire.

Another quarter, a drop in respondents indicating profitability showing the ups and downs of the recovery.  The quarter started weak but July and August showed increasing strength in most areas. The stimulus seemed to have had an impact but the responses seem to indicate that September ended on a decidedly weaker note. It was nice to see a positive GDP number come from this past quarter but we suspect a downward revision and are increasingly concerned for the last quarter. I know that the reported GDP strength was not uniform countrywide with the Northeast showing another 1.1% decline.

Lets get into the numbers-

Profitability: 46% profitable 54% unprofitable clearly a down quarter overall. The question relating to business over the last 2 weeks showed the concern we mentioned above. Things seem to be softening demand wise with less reporting a pick up or decrease and staying the same winning the majority. The question addressing how you felt about the next quarter highlights the feeling that things are not rebounding in a strong V shape but rather very up and down as sales expectations showed a decidedly average leaning.

There was mention on Bloomberg News that the American Staffing Association had indicated that the use of flex staffing was up in September for the first time since the downturn started. They mentioned an inflection point had been hit, signaling that within three to six months we will start to see a rebound in hiring full time people. The rule of thumb is flex staffing recovers a quarter ahead of the economy in general since most companies will use flex labor when they start to get busy rather then hire directly. Sensibly, since they are unsure if the recovery is sustainable. The question focused on hiring indicates companies are trying to stay the same at this point trying to get a hard feel if this recovery has any legs.

With the huge debates on healthcare nationally and locally, the question addressing highest labor costs focuses again on healthcare concerns with a full 70% indicating being concerned. When we asked what area of revenue was under the most pressure Offset still takes a high 46% of the total. Seems that for the last five quarters this area has been under significant duress pricing wise.

The last area I would bring up from the questionnaire regards the concerns area. I took a look at “other,” the largest category, representing 30% of the responses. An interesting component of the responses addresses the lack of demand in general. For example “Lack of qualified buyers,”  “Sales” or “printing budgets have not yet recovered from the economic downturn.”  Clearly the fear is that budgets will never return and normal demand will not either. As this wise person states “A changing marketplace is requiring us to either broaden our product line to meet new media needs, or commoditize our product by cutting prices to the bone” there are things we can do to survive and create demand. I do believe that even with demand changing, the drop in current demand in printing and in almost every other industry is so severe that the issue is less about printing and more about the wider economy.

We have enclosed the entire Questionnaire results below; if you have questions or would like to see additional areas explored please let me know. If you wish to be added to the survey please email us daver@semperllc.com

Semper

Click here to view the Survey, PDF Format

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