The economic boom may be over, but the label industry is still charted for healthy growth.
by Jessica Millward, Associate Editor
"DON'T BELIEVE THE hype," in so many words, was the message Federal Reserve Chairman Alan Greenspan had for Congress last month in his semi-annual report on the economy. Though he wasn't disputing the slow-down trend of mid- to late-2000, he maintained the country is not headed for a full-scale recession. He even pointed to positive signs for the first few months of 2001.
Greenspan did warn Congress, however, that economic forecasters could never really predict recessions, because they are largely caused by the unreasonable fear that overcomes business and consumers alike. He lamented, "Our economic models have never been particularly successful in capturing a process driven in large part by non-rational behavior."
Curbing that non-rational behavior is an imperative for the label industry if it is to continue the steady growth sustained over the last several years. Printers' tendency may be to watch the Dow and hit the panic button, simply because they have become accustomed to record growth rates.
Part of the let-down aspect of the end of 2000 seems almost inevitable now. As the soon-to-be released 2001 Tag and Label Manufacturers Institute (TLMI) North American Pressure-Sensitive Label Study (NALS) suggests, significant label market growth was expected in 2000 because of the economic exuberance evidenced in 1999. New product launches and consumer product promotional campaigns were at an all-time high in 1999, NALS learned, and pressure-sensitive labeling technology was the beneficiary of multiple product migration shifts lending themselves to pressure-sensitive application methods.
That pace slowed, however, leaving the NALS to conclude North American pressure-sensitive label growth for 2000 came in at below-forecasted expectations. Further growth is still anticipated; profit margin predictions are just slightly more conservative than those of the "roaring" 1990s.