What do commercial printers and family farms have in common?

Sadly, quite a bit. The name of the game in the graphics industry is consolidation, according to a recent report issued by Grant Thornton LLP and the Printing Industries of America. As margins continue to shrink on many items produced by commercial printers, conglomerates are swallowing up independent firms.

In addition, the cost of high volume, digital equipment (think Xerox iGen3, Xerox DocuColor 8000s, or Canon IR 9070s) is creating a barrier to technology upgrades or even entry into the already competitive market of on-demand printing.

"The industry's margins have decreased in some markets because of the overabundance of supply and competition," says Alex Laskowski, a partner with Grant Thornton.

According to the national printing industry survey, 65 percent of respondents expected to see some sort of merger, acquisition, or restructuring activity this year. But consolidation is not always a bad thing, as the survey indicated that 55 percent of respondents expected an increase in margins in 2006.

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