Complete Story
08/26/2020
COVID-19 Business Indicators Show Recovery
Source: David Wilaj, PRINTING United Alliance
The first half of 2020 has been burdened by one of the most brutal economic environments printing operations have likely ever experienced. While some economic indicators in the last month have been boosted by pent-up demand, optimism and other factors, a summer surge in virus cases will likely temper previous economic gains moving forward. States facing surges in cases have already begun to roll back or halt portions of their reopening process and will surely institute additional guidelines to prevent further spread.
Although a rise in cases will certainly set our economy back, it does not discount the clear steps toward recovery that the country has seen over the past few months:
- Unemployment rates continually decreased to 13.3%, 11.1% and 10.2% in May, June and July respectively. These numbers were much lower than what was anticipated by analysts.
- Initial jobless claims dropped below 1 million for the first time since March in the first week of August.
- In June, consumer spending, the anchor of our economy, jumped by 5.6%. This follows a record breaking increase of 8.5% in May.
- New orders for durable goods rose 15.1% in May and 7.3% in June.
- The Institute for Supply Management’s Manufacturing Report on Business indicated that the manufacturing sector grew in July with a PMI of 54.2%. Anything over 50 indicates activity is rising.
Without these positive strides, the second wave of cases could have forced the economy to a new bottom, greater than the deepest parts of contraction earlier this year. In fact, many economists and analysts still believe that the worst is over and although full economic recovery may be delayed, things will continue to head in a positive direction aside from a few speed bumps.
Many printers echo this sentiment. In the second COVID-19 Print Business Indicators Report, participants indicated that activity as well as optimism was rising across all segments compared to the deepest days of the crisis. Throughout March and April, only around 5% of printers indicated that their sales, production, work on hand, and quote activity were trending upward. Since then, things have meaningfully improved for these companies. The figure below shows that more than 25% of firms surveyed report that sales, production, and quote activity rose, while just under 24% of respondents report work on hand trended upward. While this is a long way from where the industry wants to be as more than 70% are still seeing these metrics decline or stay the same, it is a vast improvement from the deepest part of the downturn.
