Machinery Prices Up Only Marginally in 2001

The Labor Department's Producer Price Index (PPI) for the total product output (from U.S. manufacturers) of the printing trades machinery industry was a scant 0.4% higher this August than during August 2000. This provides definitive evidence that inflation in the capital sector of the printing/publishing industry is even lower this year than during 1999-2000.

Printing machinery prices will increase by less than 1% for the third straight year during 2001. Among the major product subsectors of printing trades machinery, average prices in the offset lithographic printing press category were up 0.6% between August 2000 and August 2001. Despite the fact that prices are a bit higher at this point of 2001 than during the same time last year, the price index for this product group hasn't changed since last December. Average binding machinery and equipment prices this August were a modest 0.8% higher than at the same time in 2000, an increase sharply lower than the 4.7% average inflation rate recorded in the binding machinery subsector between 1999-2000.

U.S. manufacturers of printing equipment will have little latitude to increase average prices much, if at all, during the next six to nine months, given the weakness in capital spending and the uncertainties surrounding the timing and depth of the (hoped for) economic recovery.