Profits per Print Establishment Best Since 2000

[prwhite]

According to Dr. Joe, "Despite there being $28 billion less printing shipments, 8,000 fewer printing establishments, and 73,000 fewer employees. It was the best profits per establishment ($173,000) since 2000 ($300,000)."

 

[davarino]

Today's dollar is worth about $0.65 in year 2000 money. Profits per establishment should be higher (even in a non-inflationary sense), simply because there are less of us to share the pie.

Dr. Joe is not terribly convincing. I contend that the better index is how many of your competitors failed last year.

 

[Al Ferrari]

The better index of what? What does it mean if that number is high or low?

Al

 

[davarino]

The better index of what? What does it mean if that number is high or low?

Better index of the health of the industry.

What does it mean? When my competitors go out of business I am getting a bigger piece of the pie. If the pie is also shrinking faster than they are going out of business, then things are going to still be getting even tighter for me.

Of course this feeds into the false idea that what is happening to my industry is going to happen to me. Indices usually tell us very little except for aggregates... notice that no economist ever talks about special cases and why they are special and worthy of attention. And yet each business is a truly special case: it feeds special families of special people who are not machined models of each other.

If I am more deft at dealing with the challenges, all the naysaying in the world will not make me fail.

Indices are, in the final resort, the way that economists try to justify their existence to people who want to worry.

 

[drjoewebb]

The post includes answers and concerns about the questions raised here Profits per Print Establishment Best Since 2000; Annual Industry Profits Best Since 2007 - Economics & Research. The data are inflation adjusted; the post also includes data about profits per employee, which changed significantly to the upside in 2013.

Bigger discussions about the multi-year process underway were started in Disrupting the Future which is still available for free as a download.

My presentations to print audiences include the admonition that "data is not destiny" and we have many print businesses that are really outdistancing themselves from weak competitors. When I make my presentation this weekend at PICA's meeting, that will be an important part of the discussion. I also continue my rant to ignore the economics, and to ignore direct competitors when determining strategy; they are both backward looking, like a rear-view mirror, and it's almost impossible to move forward when you're doing that.

As far as the shrinking pie, I did write an important piece that explains those dynamics back in February "How Survivorship and Merger Activities Affect Industry Survey Results and Statistics".

In a March posting I emphasized the importance of organic growth, and what the industry looks like after adjusting for inflation and consolidation activities. Industry data are misleading unless these factors are part of the context of explaining them.

I do talk about special cases all of the time. Per the spirit of your note, perhaps I do that because I'm not an economist. I'm a businessperson and at times an entrepreneur. Understanding economics helps us find opportunities to pursue and opportunities to avoid.