“The Latin American print forecast proves to be a key indicator of industry trends for our very important core show audience,” says George Ryan, GOA president. “We have our finger closely on the pulse of the Latin American economy and performance, in order to adjust our education and show offerings accordingly. The report seems to be positive for the region, overall.”
Trends in the global environment
The report finds that, in 2014, the world economy will be characterized by growth in advanced economies and slowing growth in emerging markets, according to the International Monetary Fund (IMF) analysis. The IMF has projected a GDP growth at 3.1% for Latin America in 2014. The 3.1% rate is higher than the projected GDP growth for advanced economies (2.6 % for the U.S. and 1% for the Euro area), but lower than the projected average for emerging economies (5.1%).
The report also indicates that the gradual recovery of the U.S. economy will positively impact Mexico, where GDP will move from a weak 1.2% in 2013, to a robust 3% in 2014. In addition, the US recovery will also benefit Central America and Colombia with 2014 growth rates of 3.9% and 4.2%, respectively.
Mexico, Brazil, Argentina and Colombia
The Mexican printing growth in 2014 is estimated at 2%, assuming an economic recovery in the GDP with growth of 3.0%, according to the study. The Mexican printing industry will not reach the projected growth of 3.0% made for 2013 reflecting the economic growth downgrade during the year. The gradual adoption of the government mandate for electronic invoicing has had a negative impact on printing volumes eliminating the need for forms, receipts and invoices.
The Brazilian printing growth will moderate in 2014 to 1.5 %. The IMF estimates GDP at a moderate 2.5% in 2014. The forecast cites that the GDP growth is helped by the devaluation of the recovery in consumption and economic policies that promote investment. Associação Brasileira da Indústria Graphics (Abigraf) projects a decrease in the printing industry of 2.4% for 2013.
In Argentina, the report finds that printing growth is estimated at 1% in 2014. The IMF forecasts GDP at 2.8% in 2014 with an inflation rate of 11.4%. The Argentina Industrial Union (UIA) estimated in July 2013 that the manufacturing industry grew by 3.2% year over year. The paper and board industry contracted by 2.4% and the publishing and printing industry grew by 1.2%.
The Colombia print growth is estimated at 2% in 2014. The Industrial Opinion Survey performed by Andigraf and ANDI reported moderate decreases in both printing publishing and the label and packaging sectors in the first half of 2013, and a positive performance of advertising and commercial printing, according to the study.
In 2012, The Brazil Graphic Industry Report indicated that the label and packaging sector represents 43.9% of the printing industry. It is estimated that by the end of this decade, the Latin American packaging sector will follow the Brazilian model and will represent at least 40% of the print industry.
According to a report published in the Packaging & Converting journal, the growth rates for label converting in Latin America decreased in the first quarter of 2013 as a manifestation of the weakness of the economic recovery across the region. However, key indicators such as productivity, investment levels and profitability, showed resilience. The study found that 57% of total respondents said that the profitability of their operation remained stable and 25% reported that profits had increased.
The Brazilian Graphic Industrial Institutional Publications claim that the performance of its industry increasingly resembles that of the advanced countries with modest GDP growth.
For a copy of the full report, click here.