Supply Chain Impact

WHAT WE’RE SEEING

LABELS MARKET, cont. Label & NarrowWeb Mid-Year Economic Report

The resilient label industry has responded to a host of challenges, ranging from the pandemic to natural disasters. While the immediate future looks bright, there are concerns to keep an eye on. Inflation, a new presidency, social unrest, natural disasters and, of course, the continued fallout from the pandemic will impact the label industry for years to come. The pandemic has created widespread and potentially permanent changes that will require the label industry to adapt. E-commerce acceleration continues to grow, hygiene and food safety remains important, and convenience, resealable and personalization features will remain key trends. The availability of qualified employees to handle spikes in production is another test for many industries. While manufacturers were already facing workforce shortages, that difficulty has been exacerbated during the pandemic. In addition, UL helps uphold standards in marking and labeling, the global safety science leader has launched new services to ensure labels comply to ANSI/CAN/UL969A. RETAIL SIGNS & GRAPHICS State of the Market Price increases are expected to continue throughout 2021 and beyond. Manufacturing schedules and the delivery windows for imported products are also expected to continue to experience delays. Industry Update According to the most telling business indicators such as confidence and quote activity, nearly 60% of companies expect business to improve during the months ahead, essentially doubling last quarter’s 30.7%, while 49.8% report quote activity is increasing, up from 33.9% three months ago. Both are the highest readings since the start of the pandemic. Throughout 2021 and beyond, it is expected that rising inflation will drive up prices. This has already begun for some printers. More than 35 percent saw an increase in substrate prices, and 27.1% saw an increase in consumable prices. Combined with those who had supply disruptions (47.7%) and shipping issues (43.7%), these increases will likely force printers to either pass these costs to their customers or will force them to depress their profit margins. Printers will also struggle to bring in qualified and/or experienced workers throughout the rest of the year, further increasing the number of printers facing employee shortages (28.1%). PACKAGING MARKET State of the Market 2021 has brought about some interesting trends within the packaging industry. Consumer habits changed significantly during the pandemic. Home delivery of food and consumer products increased demand for packaging containers and the cartons they are sold or shipped in. With e-commerce continuing to be a consumer preference, technological advancement and sustainability will remain a priority. The packaging industry has implemented and adapted to various industry trends worldwide. Reliance on e-commerce businesses has resulted in brands opting for more cost effective solutions in the wake of the pandemic. With brick and mortar stores seeing little to no foot traffic due to pandemic lockdowns, spending on high quality printing methods, like offset printing, have proven to be less effective.

taylor.com