(Good) Signs of the Times

All indicators point to continued economic health and stability for the nation and package printers during 1998.

by Dan Cray

If you're having a sense of deja vu as you look at your company's bottom line this year, you're not alone. Nearly one-third of the way through 1998, economists say that with a few exceptions all economic indicators are about the same as they were last year—and that's good news.

As the nation continues in one of the most drawn-out economic expansions of the post-war era, inflation and interest rates are steady, while unemployment figures are the lowest they've been in 24 years. In 1997 inflation was 1.7 percent—the best in 11 years. The economy's growth was similarly bullish—3.9 percent, the strongest in nine years.

"All the fundamental indicators are strong, and the '97 economy was so strong it gave us some momentum rolling into this year," says Ron Davis, chief economist for the Printing Industries of America (PIA). "We're definitely on a growth path for the rest of this year, the only question mark is the end of this year and into 1999, and there's certainly nothing to indicate any kind of a slowdown."

What does it mean for me?

Indeed, with indicators so positive across the board and more than eight years of economic expansion, experts think there is a real chance this could prove to be the longest peacetime expansion in U.S. history. Already the post-war record of 92 months of overall growth, set between 1982 and 1990, has been surpassed.

What does this mean for package printers and converters?

For starters, more growth. "Packaging is certainly part of an economy that is reflecting the same good consumer sentiment," says John McDeVitt, corporate economist at 3M. "Due to the strong demand and increased capacity utilization within paper, we have seen some price increases, particularly for linerboard, which is of course reflecting how strong the economy really is."Not everything is going to mirror the '97 economy, however. While growth is expected to continue, most of that growth is forecast for the first six months, with conditions gradually cooling.