ICSM Business Printing Industry News: a rise in insolvencies as the sector contracts with news of more printers shutting up shop due to debt and increasing energy costs

By Harry Mottram: The print industry has been highlighted by the Office of National Statistics (ONS) as being a particularly vulnerable industry in part due to soaring energy costs. The ONS has reported on a surge in insolvencies in the sector and its allied trades such as paper, ink and finishing.

The trade publication Print Week Jo Francis reported the rise in business failures was caused ‘during a time of persistently high energy prices, more than one in ten businesses overall reported a “moderate-to-severe risk of insolvency” in August.’

She wrote: “During 2020 and in Q1 2021 many firms that would otherwise have failed were kept afloat by government support measures such as the furlough scheme. In Q2 2022 the total number of insolvent companies was 5,629, the highest level since Q3 2009. The category of ‘printing and reproduction of recorded media, accounted for around 10% of insolvencies in the manufacturing industry in H1. In Q2 49 printing firms went bust, the highest level since Q3 2013.”

Ian Carrotte of ICSM said his business intelligence group had a large number of printer and print related business members and that the industry had been hit badly. He said the most recent major casualty had been the YM Group in Yorkshire who printed magazines which had left their suppliers out of pocket. Others included the Cascade Group who had gone this month, Edward Thompson in Sunderland and the Leicestershire based SBS Print Group.

“One factor has been historic debt which has been exacerbated by the rise in interest rates and the increase in interest rates,” he said, “but I note the ONS are citing energy costs as running a print shop or factory is energy intensive. We have appealed to the Government’s business secretary for help for the industry this winter as it is vulnerable to price hikes. And we back the IPIA’s initiative to canvass industry in their survey to gauge opinion and lobby Jacob Rees Mogg.”

The ONS stated: “The composition of fuel use in this division has changed significantly since 1990. The division's use of hydrocarbon fuels is only a fraction of what it was in 2005; however, it remains reasonably energy intensive. Gas has maintained its dominance in printing and reproduction of recorded media, making businesses within the division vulnerable to a period of persistently high gas prices; the remaining energy consumption for the division is primarily accounted for by diesel.”

Jo Francis said: “The ONS stats show that the rise in insolvencies overall has been driven by Creditors’ Voluntary Liquidations, which made up 89% of the total. CVLs are typically used by SMEs to wind up a company voluntarily.”

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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk