Print Machinery Prices Stable in Early 2003

Printing equipment prices have been nearly steady for 14 months, while both U.S. printing sales and printing equipment sales were stagnant. With a stronger market expected for next year, small price increases of 0.5% to 1.0% are now likely, with both printing activity and equipment purchases forecast to be rising by the end of the year.

Prices for imported equipment from euro-currency countries have increased only marginally in response to the 23% appreciation of the euro in the last two years. The import price index for all manufactured goods from countries that use the euro is up only 2% for the year ending in August.

While manufacturers have absorbed the currency exchange losses during the weak market, they will quickly pass the cost on to buyers when the market strengthens. Thus, there is a substantial risk of a spike in prices late next year when European economies are expected to also be expanding rapidly.

Unfortunately, the currency future markets expect the euro to appreciate another 5% in the next year.

Apart from currency changes, the inflation outlook is for equipment price inflation to rise very little, and remain at 1% or less.