TLMI Trend Report
From the Index & Trend Report for the Tag & Label Manufacturing Institute, Inc. The board of Directors for TLMI, Inc. have approved the continued publication of this report in 2013. Instead of twice a year, it will be three times per year and will feature metrics to help assess the overall health and performance of the North American web industry’s owners & managers as they continue to fine-tune & develop best practices and business priorities.
An Economic Overview
The Economy as a whole seems to be experiencing a slow but steady recovery. Consumers and businesses are saving money with natural gas prices being at an all-time low, as well as 1.3 million jobs being added in 2012. Leading indicators signal continued growth and mild re-acceleration throughout next year.
The Nondefense Capital Goods New Orders shows Business-to-Business activity surpassed the pre-recession peak of last year, sitting at 8.9%. Also, Total Wholesale Trade and Retail Trade are surpassing record levels and still growing; this signifies Consumer Confidence in the Economy. Of course, it doesn’t reflect the sales of Automobiles.
The annual Industrial Production Index for the United States is at its highest in three years and it also 3.8% over last years. It is projected to have continued acceleration throughout 2013 and experience a slight downturn the following year.
There are some National and International concerns that increase the pressure on the Economy. On the National side, gas prices have been on the decline but remain as high as $4.00 per gallon throughout much of the country. Also, the Unemployment rate is staying put at about 8.1%. From the International side, decelerating growth in China, along with fiscal problems in Europe, could weight heavily on U.S. exports. These are not necessarily new problems to the U.S. and the country still experienced Economic growth despite these issues.
Various Production Sectors in the Economy
- Only three sub-sectors in the Retail Sales sector were below the previous years: Appliance/Electronic stores, Entertainment stores (Books, radio, and TV), and Department Stores. The more positive sectors included: Building Supplies, Miscellaneous stores, Fuel Stations, Apparel, and Restaurants.
- Overall, Food Production is 2.5% over last years and has been steadily rising since August 2010; with the exception of Grain Food Production, which is 4.5% under the previous year and has been on the decline since the year before that.
- The most promising sectors within Food production are: Bakery, Dairy, and Produce Fruit & Vegetable Preserving Production. These sectors remain above last years and is expected to continue on the ascent.
- Beverage Production has risen 5.6% over the past years and is expected to continue rising, although it is expected to experience a slower rate towards the end of the year.
- The Plastics Material & Resin Production is expected to be up 4.7% over 2011 by the end of this year and is also expected to stay the same by the end of 2013.
- In the Pharmaceutical & Medicine Sector, numbers have fallen 1.1% over last years but is expected to finish 1.9% over 2011 by the end of this year, with another 2.7% increase throughout 2013.
- Cosmetics & Perfume Consumption is up 5.3% over last year and a continued rise in production is expected next year.
- Printing Production is operating on a decline, but is expected to decline at a much slower pace by the end of 2013. The bright spot in the Printing Production sector is in Children’s and Young Adult Book Markets.
- Food & Beverage Consumer Price Index hit an all-time high in April 2011 at 3.0% and rose 3.9% over the last twelve months. Prices are expected to rise over the next two years but the inflation rate is expected to slow by the end of 2013; all this bases on Consumer demand as the Economy pulls ahead overall.
The Main Issue During Current Reporting Period
The main issue during the period this report covers is TLMI converters being asked about the main challenge covering the new business of obtaining new vendors in the competitive marketplace for Package Buyers’ who are implementing transactional supplier agreements to replace the decreasing number of long-term agreements.
The following is a list of some of the results of the survey by the converters’ on what they believed to be the greatest challenge to obtaining new business:
- Getting appointments.
- Beating the cost for Information Systems labels.
- Communicating a credible proposition.
- Finding the right number of qualified Sales Representatives to cover their operating area, in addition to hiring and training them.
- People in Leadership working too many projects while not being focused.
- Motivating distributors to pursue up-market applications.
- The willingness of the larger label companies to pursue market segments they would not pursue in the past.
- More prospecting. Too many vendors calling on the same customers’.
- Because of the Economy, too many potential customers’ are afraid of change.
- Same old challenge of trying to find a qualified decision-maker to move a company forward.
All in all, even with the improving Economy, the companies face the same challenges as nearly all business entities. A Leadership team that isn’t overworked that has a clear focus on reaching their goals in recruiting and training qualified Sales people who can blaze a trail at hunting down new prospects rather than calling upon the same old customers’ all the time; and , of course, controlling their profit margin as the cost of raw materials increases. As always, in the business world, the main problem is being shorthanded. In this case, the member companies need to find new vendors and qualified press operators. On a more positive not, access to capital came out to be their least significant pain point.
To read the complete Index & Trend Report, visit the TLMI website and click on the members section.