Britain is officially back in recession, according to figures from the Office for National Statistics, which revealed that the economy shrank by 0.2% in the first quarter of 2012.

The contraction follows a 0.3% fall in gross domestic product in the fourth quarter of 2011, indicating that the country is in the throes of its first double-dip recession since 1975.

The ONS figures reveal that output for the production industries decreased by 0.4% in the first three months of the year, following a contraction of 1.3% in the previous quarter. The construction sector was the hardest hit, with output decreasing by 3% over the same period, following a 0.2% decline for the previous three months.

Despite the latest bout of bad news for the economy, a separate report by insolvency specialists Begbies Traynor found the number of businesses in distress in Q1 2012 to have fallen year-on-year, with the manufacturing sector hailed as "the star of the economy".

Printers told PrintWeek they were cautiously optimistic that the industry may be over the worst. Mortons Print chief executive Ian Fisher said that 2012 had got off to a promising start but added that margins are still being squeezed.

He said: "Our first quarter for Mortons Print – February to April of 2012 - looks to be around 5% up year-on-year in revenue terms.

"Despite upward pressure on newsprint costs abating, the continuing challenge for the year will be to ensure that this feeds through to the bottom line to restore much eroded margins.

"So far this year we have observed a relatively lower level of churn than that seen in recent years, with less absolute focus on price from customers.

"There continues to be so much capacity removed that at some point a semblance of equilibrium must logically be restored. I do not think we are quite there yet, though the signs are that this is perhaps closer than at any point over the last three years."

Harry Skidmore, chief executive of finishing company Easibind, said his company had also witnessed an upturn in trading conditions in the first three months of 2012.

"Our sales are 25% up on the first quarter compared to 2011, and business is looking good," he said.

Mark Snee, managing director of Leeds-based Technoprint, said he felt that UK print may be "moving into more positive territory" but added: "We don’t see any sign that print budgets are being restored yet."

Elsewhere, Precision Printing managing director Gary Peeling was more circumspect: "My view would be that the recent fall in noted distress is more to do with only those well managed businesses being left rather than any noticeable upturn in general demand," he said.

"Tough trading is what we will have for some time, as only the tough are left and we have to 'Keep Buggering On' as Churchill put it."