Upbeat Mood Heading Into Nexpo '94 p. 11

By: George Garneau

Equipment and service vendors say business is finally bouncing
back, as newspapers, bouyed by increasing advertising and
earnings, are once again ready to start spending some money sp.

AFTER A FOUR-year ad slump that curtailed purchases of new plants and equipment, newspapers are back in a buying mode.
Vendors who sell equipment and services to newspapers are heading to the newspaper trade show Nexpo '94 in Las Vegas this week in an upbeat mood and flush with growing business.
Rebounding advertising and profits for newspapers are, in turn, breaking up a logjam of pent-up demand that has accumulated since the worst newspaper recession in decades forced many papers to cut their staffs and to shelve much capital spending.
Rising bottom lines have lifted the industry's confidence to the point that publishers are opening up the checkbooks for new and expanded plants, computer systems, presses and mailrooms.
Two years ago, Dario D.D. DiMare, newspaper architect for the Haskell Co., based in Jacksonville, discussed construction projects with newspapers while they were laying off staff.
Today, he said, "everybody's jockeying for studies . . . . They're soliciting proposals and beginning to talk."
He compared the scenario with a driver who delays replacing the old wreck for five years, until a raise at the office motivates a new car purchase.
DiMare said Haskell, new to the newspaper industry, has at least a dozen newspaper construction projects in the works, including four signed contracts for new plants or expansions, and some plans have been on hold since as early as 1985.
In New York City alone, three dailies ? the New York Times, Daily News and New York Post ? are all planning new production plants. The Wall Street Journal is investing $50 million to install more press units at plants around the country so it can print color ads. And two North Carolina papers ? the Charlotte Observer and Raleigh News & Observer ? are going forward with major investments in flexographic presses.
The Newspaper Association of America's annual capital outlay survey says newspapers plan to spend nearly $1.1 billion this year, 13.3% more than they spent last year. That includes spending for:
? Building construction and modernization, up 14% to $284 million.
? Pressroom equipment, up 7% to $193 million.
? Editorial and classified systems, up 33% to over $101 million.
? Telecommunications, nearly 40% higher to $16 million.
? Mailroom inserters and stackers, 41% higher to over $97 million.
Plans for newspaper capital spending exceed U.S. business in general. According to the Commerce Department's most recent report, businesses plan to spend 8.3% more on capital projects this year, ahead of the 8% pace recorded a year earlier.
"A lot of newspapers held back for years for uncertainty about the economy, and sooner or later, those companies are going to have to replace ailing equipment, particularly on the front end," said Eric Wolferman, head of technology operations at NAA.
"I would see things getting healthier, probably not a dam bursting, but somewhat better."
One sign of newspapers' buying mood is that Nexpo '94 attendance was running about 18% higher than last year and is expected to reach around 13,000.
For System Integrators Inc., the Sacramento-based, front-end systems software vendor, business is "definitely up from last year" and ahead of projections for this year, said Roger Peterson, manager of marketing communications.