A former tannery has been magicked into an arts venue, the lights have been dimmed, and a roomful of publishing executives are sitting on creaky wooden floors, cross-legged or knees scrunched up, school-assembly style. The canapes can wait: the group has gathered to listen to writers reading their latest, soon-to-be-published works – a heart-rending family memoir, a Jazz Age tale, the gangs of Los Angeles.

These are some of the stories publishing house Picador hopes will enthral readers this summer – and almost every writer reads from a paperback. One, poet Kate Tempest, speaks from memory, electrifying the room. No Kindles, Nooks or iPads in sight.

Public affection for print runs deeper than some had thought. On the eve of the London Book Fair, a three-day trade extravaganza that starts on Tuesday, optimism is rippling through the industry that it can weather the digital age. The idea that the ebook will kill the paperback seems increasingly like a tall tale.

Total spending on print and electronic books increased by 4% to £2.2bn in 2014, according to market data firm Nielsen. Ebooks now account for around 30% of all books published, including almost 50% of adult fiction. But the decline in print is levelling off as migration to ebooks declines. For some in the industry, it is a sign the dust is beginning to settle after the great digital shake-up.

“Ebooks will continue to grow, but the speed of growth has started to slow and perhaps we are getting close to saturation in some areas,” said Steve Bohme, consumer director at Nielsen.

Millennials, the generation supposed to be glued to their screens, still buy paperbacks. Sales of children’s literature in print rose by 9% in 2014, largely driven by teens, twenty- and thirtysomethings buying fiction marketed as young adult, such as the Hunger Games series or The Fault in Our Stars, John Green’s love story about a teenager with cancer. The mood has also been buoyed by the resurgence of Waterstones, which reported a 5% rise in physical sales in December.

Cathy Rentzenbrink, one of the new authors at the Picador event, said it was a “magical moment” when she received the first printed copy of her book, a compelling memoir of family life after her brother was knocked down aged 16 and left in a permanent vegetative state.

A lifelong bibliophile, Rentzenbrink has sold books (at Waterstones), reviews books, runs the adult literacy charity Quick Reads and chairs the annual Booksellers’ Association conference: “Booksellers are more optimistic. I think this year the mood will be the most positive yet and that is because people have adjusted.”

Nigel Newton, chief executive of independent publisher Bloomsbury, whose catalogue spans Margaret Atwood and the Wisden Cricketers’ Almanack, sees the future of bookselling as finely balanced. Publishing itself was in a robust state, he stressed, but the outlook for booksellers is less certain. At a recent industry conference he likened bookselling to the bus in the final scene of the 1960s heist film The Italian Job – balanced on the edge of the precipice. Asked if the teetering vehicle will tilt back on to the road or tumble down the cliff, he said he was an optimist. “I expected the statistics to support a complete downward picture, and in fact they don’t,” he said.

Optimism is woven into publishing’s business model. That is certainly true of Bloomsbury, which in 1997 took a punt on an unknown author’s story about a boy wizard. The Harry Potter publishing phenomenon has sold more than 450m copies and poured untold cash into Bloomsbury’s account. (It declines to reveal exactly how much.) And in September the financial magic looks set to continue when Bloomsbury publishes the first of seven lavishly illustrated editions of Harry Potter, with his world recreated by artist Jim Kay. There will also be an ebook, but the project speaks volumes about the industry’s enduring confidence in print.

The publisher is also experimenting with multiple editions. In October, it will publish PJ Harvey’s debut at several price points. The Hollow of the Hand, a volume of poetry in collaboration with photographer Seamus Murphy, chronicles their journeys to Afghanistan, Kosovo and Washington. A paperback and ebook will be available for £16.99, dedicated fans can splash out £45 for a lavish hardback, while the most hardcore can get a limited signed edition for £400.

Zoe Sugg, aka Zoella, with her novel, published by Penguin. Photograph: Dominic Lipinski/PA

It is just one example of how publishing, which has always judged a book by its cover, is fighting back against pixels with more lavish printed objects. Shelves are filled with ever more beautiful books: classics bound in Victorian-style cloth covers with dyed print edges, or cookbooks with expensive gloss finishes reminiscent of bar-room tiles, such as Martin Morales’s Ceviche. “Print has become the luxury model,” Rentzenbrink observed. “There is almost a festishisation of the print book.”

The “very welcome resilience” of print was down to the place of the book in culture, said Richard Mollet, chief executive of the Publishers’ Association. “We are not talking about the CD, which came out of the blue in the 1980s.”

He points out the example of Zoe “Zoella” Sugg. Her video blogs are followed by millions, but when the ultimate internet star decided to experiment with fiction, she turned to Penguin, a traditional publisher, which brought out a hardback and ebook. “[A print book] is a marker of authenticity: it is a marker of the reflection, of the effort, and it has got durability,” Mollet said.

If print is resurgent, publishers are also raising their ambitions on digital books. In January, Michael Bhaskar and two partners set up Canelo Publishing, an ebook-only venture, joining existing players such as Bookouture to give some love and attention to ebooks, once little more than hastily proofed PDF files.

He argues this will marry the best of traditional publishing – editing, proofreading, attention to the author – with imaginative design and promotion tailored to digital books: “The ebook is too often an afterthought: we want our ebooks to be beautiful.”So far, he has eschewed more experimental ebooks that make demands on the reader to choose the next phase of the story: “What we want to do first and foremost is give people great stories.”