US PRINT MARKET MAINTAINS SALES GROWTH AND EMBRACES AI OPPORTUNITY

Despite remaining flat during the first quarter of 2024, sales growth of 4.1% on average is expected this year. Half (50.4%) of PRINTING United Alliance’s State of the Industry (SOI) survey participants expect to increase sales in 2024. A healthy appetite for live events, as well as continued enthusiasm in the travel and tourism industries, are cited as factors contributing to this moderate growth, as well as the removal of weaker competitors in the market. Of course, the fact that this is a US election year will certainly have some bearing on growth as businesses benefit from the need for election material printing. 

The largest piece of the puzzle is optimisation. Businesses are boosting efficiency by zeroing in on cost and quality control, and productivity, alongside automation. In addition, the more effective use of business intelligence systems, such as Enterprise Resource Planning (ERP), Copier and Multifunction Printer Resource Management (CRM) and Management and Information System (MIS) solutions. 

While there is justified optimism for increased sales growth, profits remain under pressure, thanks to increased inflation. A whole host of operating costs continue to rise, including labour, transportation, energy, postage, insurance and debt service. These overheads are squeezing margins for SOI participants. Increasing sales (58.5%), maintaining profitability (57.6%) and economic/business conditions (55.1%) top the list of major concerns. This demonstrates that businesses are not expecting any dramatic changes in conditions through year end. 

In the first quarter of 2024 – while 33.9% of those surveyed saw an increase in pre-tax profitability – 41.3% experienced a decline. This shows that even moderate inflation is enough to put stress on profit margins. While the challenge of substrate costs has improved since Bowers’ last overview of the US market – now a major concern for just over a quarter of participants rather than one of the leading anxieties – rising labour (49.2%), transportation (39.3%) and energy (33.3%) remain primary sources of tension for the panel. Any re-acceleration of cost inflation in soft markets will further impact those margins. 

Every company in the printing industry will be impacted by the AI/big data revolution

Despite low expectations for the economy among participants, productivity is increasing thanks, in part, to growth in the labour force. Since the April 2020 pandemic low, the civilian labour force – aged 16 years and older – has been boosted by 11.1 million workers. This includes a 6.7 million increase in workers aged 25–54. (Source: U.S. Bureau of Labor Statistics, bls.gov.) These productivity gains facilitate healthy increases in employee compensation and play a role in moderating unit labour cost rises. Although this has been a long time in coming, it is very encouraging to see. 

In addition to a burgeoning labour force, the adoption of artificial intelligence (AI) is also positively impacting productivity. Every company in the printing industry will be impacted by the AI/big data revolution. The Alliance is certainly urging its members to embrace the potential of AI technology.

It is no surprise to see interest in AI 
on the rise among SOI participants. Since September 2023, the number of respondents that confirm they are using AI (either independently or embedded in OEM products) has jumped from 24.7 to 39.7%. 
In addition, those neither using AI, nor planning to within one year, has fallen from 49.3 to 33.9%. 

Even moderate inflation is enough to put stress on profit margin

Digging into what panellists are actually using AI for, this report finds that content creation such as text, audio, social media and podcasts, tops the chart at 28.6%. Twenty-one per cent are planning to use it 
for this function within 12 months. With generative AI solutions – such as OpenAI’s ChatGPT – dominating headlines, it makes sense that content creation is the most widely adopted function. 

However, if SOI participants implement their plans, content creation will not hold the top spot for long. AI use will grow significantly across all functions in the next year. The most notable rises will be in its utilisation for operations, customer analytics and sales. AI’s use in operational activity – such as predictive maintenance, quality control, supply chain/procurement management and logistics – is currently at 12.6%, with 37.8% planning to use it for this function within one year. That means just over half of SOI participants will be using AI in operations this time next year. 

AI use will grow significantly across all functions in the next year

Just over a quarter (26.9%) plan to use AI for customer analytics tasks within the next year and the same share of respondents told the Alliance that they will be using AI for sales optimisation. This includes automating administrative tasks, scoring leads, forecasting sales and evaluating sales personnel. More than 25% plan to integrate AI into their customer service, as well as performance evaluation. The Alliance is excited to continue monitoring and supporting its members on their AI journeys. Simultaneously, it is urging printing businesses to ensure their AI initiatives are aligned with business objectives. A clear understanding of how it will benefit business operations is paramount.

More than 25% plan to integrate AI into their customer service

Increasing sales and maintaining profitability are paramount for members. The Alliance is proud to see so many contributors to its SOI data demonstrating the ways in which they are making this happen. Inflation, the economy, labour shortages and higher interest rates are all factors out of participants’ control. However, when it comes to those factors within their control, so many members of the research panel are grabbing these opportunities with both hands. These include investing in and using business intelligence systems more effectively, strengthening web-to-print capabilities, rooting out inefficiencies and embracing the advantages of AI and big data. The Alliance is here to advocate for its members as they take charge of the opportunities available in 2024 and beyond. 

Increasing sales and maintaining profitability are paramount for members

This year’s PRINTING United Expo will take place from 10–12 September at the Las Vegas Convention Centre. Global attendees will have the opportunity to take in education, insight and resources speaking to these very topics. In addition, participants will see the very latest industry technology, live. The Alliance Research team and various subject matter experts will present on a range of topics including economic trends, AI, workforce development, segment-specific trends and best practices. Register to attend the Expo to experience it all at www.printingunited.com 

The Alliance’s State of the Industry Report is free to members of PRINTING United Alliance and is €182 ($199) for non-members. Copies can be obtained  here