US ink market continues to struggle

May 28, 2012

A report by IBISWorld suggests that the US ink market continues to be affected by “declining demand”, with profit margins sinking across the nation.

The report states that the demand for ink has been hit by former newspaper readers “migrat[ing] to the internet for news content”, and that as well as newspaper and magazine publishing, packaging and labelling industries “have reduced their ink purchases” due to reduced spending in the recession.

The analyst noted that in response to the negative trends, the industry will need to “invest in research and development of new products”, with industry revenue declining at 4.3 percent to $4.4 billion (€3.5 billion) in the past five years, and expected to fall 3.1 percent this year.

Andrew Krabeepetcharat, Industry Analyst for IBISWorld, stated: “Falling revenue and rising raw material costs have caused profit margins to shrink. In 2012, IBISWorld estimates that profit will represent only 0.4% of industry revenue, down from 4.2 percent in 2007.

“Declining profit has caused many operators to reduce production capacity and cut costs where possible. Consequently, the number of industry offices and plants declined 2.6 percent annually on average over the five years to 2012. The reduction in production capacity has also caused the number of employees to decline at an annualised rate of 2.2 percent.”

Of the new developments needed to boost ink manufacturing, adaptation to digital ink technology is expected, with smaller print runs and the need for “customized printing”. The analyst adds that digital-specific inks “will gain market share” in the next few years “at the expense of the traditional lithographic inks”.

IBISWorld also noted that the industry “displays a high degree of price competition in the United States, with four companies accounting for 50.9 percent of the market, and this competitiveness has “lowered profit margins, causing industry consolidation”.

Categories : Products and Technology

Tags : Inkjet Market Data USA