Subtle developments can yield positive results. While it may not be the top story in any newspaper’s business section, PPAI Research’s latest bi-monthly snapshot of August and September reveal two encouraging findings that, taken together, suggest a cautiously optimistic outlook for the promo industry.
- In August and September, the promo industry’s revenue grew by 2.2% over the same period last year, surpassing 2% growth over a two-month period for the first time in 2024 and up from the 1.75% growth rate of June and July.
- In addition, this number has creeped even closer to the current inflation rate, which has continued to drop and now sits at 2.4%.
For months now, the industry has shown modest growth while being outpaced by inflation. It seems promo’s disciplined consistency through these times has it tantalizingly close to getting over that hump.
“While the gap between revenue growth and inflation has narrowed, the industry is navigating these economic pressures with resilience,” says Alok Bhat, PPAI’s market economist and research lead.
The latest revenue data isn’t cultivated from the same methodology as the annual Distributor Sales Volume Estimate, which polls distributors of all sizes. Rather, the current assessment stems from the aggregated results of 2024 PPAI 100 suppliers responding to a flash survey.
Michael Cohen, CEO of Harper + Scott, which was the No. 64 distributor in the PPAI 100, sees the numbers as the ripples of a broader resurgence for branded merchandise.
“Unlike previous years where growth was driven by price adjustments, this increase is a clear indication of the industry’s ability to expand through new projects and stronger partnerships with clients,” Cohen says. “It’s an exciting time for the market, and I’m optimistic about our industry’s potential to continue driving value for businesses through innovation, technology and creative products.”
Distributor Perspective
Constantly interfacing with brands and promo clients, distributors have had a front seat to promo’s cautious growth. Having to work within the limitations of an unpredictable economy, the industry seems to have learned how to weather and ride out unavoidable obstacles.
“This growth is indicative of an economy that is starting to look forward,” says Andrew Titus, president of Fully Promoted, the No. 26 distributor of PPAI 100. “There has been a lot of customer hesitancy due in part to it being an election year, ongoing global conflicts, among other reasons; this growth was due in time. We may see some more slowdown in Q4 as we approach the presidential election, but I foresee 2025 being a great year for our industry.”
David Tate, president and chief operating officer of Signet, which was ranked the No. 66 distributor of PPAI 100, summed up August and September’s numbers with three words: “resilient, relevant and responsible.”
As is usually the case, especially during times when the economy shows signs of stabilizing, these survey results will not be a direct reflection of each and every promo company’s experiences over August and September.
“At Myron, we are experiencing a higher growth rate than the industry but it’s probably not a great comparison because we started from a lower level when we acquired the company in the middle of 2023,” says Jeff Lederer, owner of Myron, the No. 39 distributor of PPAI 100. “We are feeling more optimism with our customer base, though, which is why we believe the industry at large is also starting to grow as inflation decreases.”
That optimism may extend beyond promo: Holiday shoppers are expected to spend at least $25 billion more in November and December, a 2.5% to 3.5% increase from a year ago to a record $990 billion, according to the National Retail Federation’s holiday forecast.
Supplier Perspective
While the industry has welcomed an economy that seems to be stabilizing while inflation cools, suppliers have had to routinely navigate a barrage of supply chain obstacles. August and September alone have included the following supply chain headaches:
- A labor strike at every port along the east coast that went two days before it was resolved through collective bargaining.
- A Canadian rail shutdown that led to work stoppage for 9,000 workers.
- Protests, violence, curfews and an internet blackout in Bangladesh, affecting the apparel industry.
During that time, 50% of PPAI 100 suppliers reported order growth, and 9.1% classified that growth as significant. Just under 32% of suppliers saw flat order volumes. That leaves 18.2% of PPAI 100 suppliers reporting a decline in orders.
“Order growth is strong for half of PPAI 100 suppliers, but with inflation easing,
those facing flat or declining volumes need to pivot fast to protect profits,” Bhat says.
- Furthermore, less than half (46.5%) of suppliers saw revenue growth in August and September compared to the same months in 2023.
___
The full report will be available to all Professional-tier members via Premium Research within two months.
Upgrade your PPAI membership here to receive access to the full report.
