The National Association of Paper Merchants has warned that the aggregate level of bad debt has risen steeply from 2003’s figure of £13m and could reach £25m this year.

Director Tim Bowler said: "At the last Policy Group meeting in June we felt the level of bad debts in the printing industry could be back to the highest levels ever."

The NAPM is now monitoring bad debt on a quarterly basis and many of its members are paying closer attention to customers’ risk levels, demanding monthly accounts and cash-flow forecasts.

NAPM President Henry Cubbon of Antalis said the problem has worsened in recent years as slowing demand for print, heavy investment and overcapacity have led to several large printers closing down. Since 2002, paper merchants have lost £60m as a result.

Mr Cubbon revealed that the NAPM is in discussions with Vision in Print over ways to introduce productivity enhancements to printers in need of support.

"It’s adapt or die at the moment. If printers can adapt they’ll survive but many won’t and it will get worse in the next 18 months," he said.

News of the poor market conditions in print coincided with data from the Office for National Statistics that revealed manufacturers were hit by the biggest rise in raw materials costs in 20 years last month despite a drop in factory prices. The Transport and General Workers Union predicted that, on current trends, manufacturing would be dead by 2029.