Although U.S. economic uncertainties remain as the calendar shifts to 2023, a recent PPAI survey of industry distributors demonstrates optimism about the promotional products industry’s performance in the new year.
Strong Projections
Some key data points from PPAI’s recent survey:
- Ninety-three percent of distributors surveyed predict their sales will remain the same or increase in 2023.
- Roughly two-thirds of that group (67%) predict their sales will be greater than 2022. (The most common answer for how much sales would increase in 2023 was 10%.)
- Seventy-nine percent of distributors who predicted an increase in sales during 2023 expect an increase of 10% or more.
- Nearly a third of the group expecting to do more business (32.4%) predict their sales will increase by 20% or more.
The Economic Landscape
Amid the optimism relative to promo, fears of an overall economic slowdown continue.
The International Monetary Fund projects global growth to drop from 3.2% in 2022 to 2.7% in 2023 and warns that one-third of the world economy could enter a recession thanks to a cauldron of factors: inflation problems in the U.S., ripple effects from the Russia-Ukraine war across Europe and growing COVID issues in China that could cause new supply chain snags.
There have been encouraging signs at home. Inflation dropped to 7.1% in November – less than the 7.3% projection – though it remains to be seen if falling interest rates will follow.
In November, promo industry leaders told PPAI Media that they’re keeping an eye on two economic factors besides inflation: rising interest rates and freight costs with regard to the US/Renminbi exchange rate.
Time will tell how much the industry will be impacted by economic challenges, but distributors are expressing confidence about the year ahead. That echoes a recent Incentive Research Foundation report supported by PPAI that provided a healthy 2023 outlook for businesses’ use of non-cash incentives (including branded merchandise) in the workplace.
