Notwithstanding the improvement, business sentiment continues to remain significantly lower compared to the same period a year earlier. Hagop Tchamkertenian, national manager for policy and government affairs at Printing Industries says the September 2011 quarter represents the 15th consecutive quarter where reported industry outcomes came in below expected outcomes for a range of economic indicators.

The results show that only 54.9 per cent of respondents were operating at capacity/activity levels of 70 per cent or over, an outcome that is lower than the 63.0 per cent proportion reported for the same period a year earlier.

Some 90.2 per cent of survey respondents ranked lack of orders as the primary barrier to increasing production levels, an outcome that is slightly higher than the 88 per cent proportion reported during September quarter 2010.

According to Tchamkertenian over the outlook period industry respondents are forecasting net balance improvements to take place in a number of key economic indicators. Based on these forecasts the December 2011 quarter is expected to yield results including:

• Net balance increases in orders, production, sales and net profits

• Reduced employment and overtime levels

• Reduced availability of finance

• Increased availability of labour;

• Lower selling prices;

• Reduced stock levels;

• Further net balance increases in all production cost categories – average wages, other labour costs, and average material costs; and

• Increased number of outstanding debtors.

Over the next six months (December 2011 quarter and March 2012 quarter) the survey respondents expect:

• Marginal net balance reductions in investments in plant and machinery

• Moderate net balance reductions in investment activity in buildings

Tchamkertenian adds that despite the Federal Government securing the numbers to pass its controversial carbon pricing mechanism through parliament, the business climate for printers continues to remain uncertain.

He says, “The Report indicates cost pressures are once again resurfacing within the industry which will require an appropriate managerial response. The industry now faces ongoing higher energy costs which need to be addressed by both changes to operating processes and consideration being given to adopting cleaner and less energy intensive technology.”

Also according to Tchamkertenian, given the September quarter is normally associated with peak industry activity, the low capacity utilisation rates reported during the quarter confirm that underlying economic conditions remain soft.

He says, “Once again the forecasts for a range of key economic indicators remain positive confirming the general level of overall optimism amongst industry participants. Whether the breakthrough will occur during the December quarter and reported outcomes will match expectations remains to be seen.”

Some 113 companies participated in the latest survey generating a response rate of 38 per cent.

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