With consumer expenditure on the rise, demand for packaging services will increase.
Los Angeles, CA (PRWEB) July 14, 2012
Revenue for the Packaging and Labeling Services industry generally fluctuates with consumer spending. As more consumers purchase various products, demand for manufactured goods rises, leading to more products that need to be packaged and labeled. In light of this correlation, the Great Recession has dampened growth since 2007. The credit crisis and housing-market collapse forced many individuals and businesses to cut back on spending. “As the number of product purchases fell and demand from manufactures dropped,” says IBISWorld industry analyst Lauren Setar, “the demand for packaging and labeling services decreased as well.” During the past five years, revenue has moved in line with overall economic trends, as highlighted by a 6.3% drop in 2009 and subsequent recovery of 1.8% in 2010. This gradual recovery is expected to reach revenue growth of 2.8% in 2012. Overall, industry revenue is expected to increase at an average annual rate of 0.4% to total $8.8 billion during the five years to 2012.
Looking ahead to the next five years, the industry is expected to continue steady growth. Gradual improvements in the economy, including increased consumer spending, will drive growth for the Packaging and Labeling Services industry. Strong growth in household disposable income will lead to accelerated growth in consumer expenditures, says Setar, particularly for discretionary items such as toys, cosmetics, confectionery and hardware. As the demand for manufacturing increases, the demand for packaging and labeling will also rise as companies outsource for these services. Because of these growth trends, revenue is forecast to rise. The industry will remain very fragmented; currently, the four largest companies account for less than a tenth of total industry revenue.
Despite economic improvements during the next five years, industry consolidation will likely continue as firms take advantage of economies of scale, particularly in technological advances and automation of services. As a result, in the five years to 2017, the number of firms is projected to drop, while employment will rise at a modest average annual rate. For more information, visit IBISWorld’s Packaging and Labeling Services in the US industry report page.
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IBISWorld industry Report Key Topics
Establishments in this industry primarily package client-owned materials on a contract or outsource basis. The industry also provides labeling and imprinting package services. This industry excludes any activity related to the manufacturing of packaging or labeling products.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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