On the Up-and-Up
Buoyed by the surging national economy, package printers are expected to buy, diversify,and go digital to profit in 2000.
By Regis J. Delmontagne, President, NPES
A national economic expansion unprecedented in its duration and vigor continued in 1999and will continue in 2000to power the package printing industry to strong growth.
Economists speaking at December's PRINT OUTLOOK® 2000 program in Washington, DC, noted that 1999 was the fifth consecutive year in which the U.S. economy grew by 3.7 percent or more. Economic expansions throughout our history have averaged 32 months in length, while the current boom finished 1999 in its 105th month of growth.
As for the near future, CIT Group V.P. of Economic Research Michael Paslawskyj predicts a strong 2000 "is in the bag," adding that "inflation is truly dead," and "the near-term risk of recession has almost completely evaporated."
Michael K. Evans, consulting economist for NPES The Association for Suppliers of Printing, Publishing and Converting Technologies, projects further: "The economy can continue to grow at 4 percent or better indefinitely."
Of special interest to package printing specialists, consumer spending seems likely to remain very strong in 2000, due to a combination of rising wages, low inflation, steady interest rates, and plentiful credit. Americans are enthusiastically spending money on everything from automobiles to food products, from clothing to computer software.
How will all this economic strength affect the printing, publishing, and converting industries?
Print performance has always been strongly tied to national economic conditions. However, after growing more quickly than the U.S. Gross Domestic Product throughout the 1980s, and keeping pace for most of the 1990s, print sales since mid-1997 have been trailing national economic growth. Real (inflation-adjusted) sales continue to grow, but they have not been keeping up with the surging national economy.
Package printing has also been growing steadily in recent years. About 1,740 plants in the United States specialize in package printing, producing chiefly flexible packaging, according to the Printing Industries of America Print Market Analysis. These plants reported sales totaling $19.1 billion in 1998, up about 4 percent over 1997. That year's sales, in turn, were about 5 percent higher than in 1996.