Volume Picks Up for Domestic Book Printing

Book price inflation is forecast to be steady to slightly lower through 2004, at about a 3.5% annual rate. The cost pressures that accompany an economic recovery will be minimal until late in the year, except for paper and freight that already have had demand-induced price increases, with more on the way.

Nonetheless, overall inflation should be steady as inflation for other cost items, ranging from fuel to office equipment to printing equipment, will be steady or declining. High labor productivity and falling import prices will keep capital equipment inflation negligible.

The cost gap between books and competitive consumer products, except admissions, will widen further in 2004. More information will be shifted from distribution by ink to pixels.

Both consumer income and non-durable goods spending will grow slightly faster in 2004, but neither will match the expected large spending gains for consumer durables and investment goods. Generally, income and spending growth will accelerate over the course of the year, but there will be a "mini" consumer spending boom in the spring, when the second phase of the 2003 tax cuts occurs. Taxpayers will realize the January-through-June portion of the reduced tax rates when they file their 2003 annual tax returns.