Slowing Third Quarter Sales Growth Points Toward 2017 Upswing
ITR Economics’ third quarter Market Outlook Report for the promotional products industry notes that while up 2.3 percent from the year-ago level, growth has slowed in recent months. However, ITR points to macroeconomic indicators that suggest that 2017 will be better than 2016 for the U.S. economy and most PPAI members.
The economic research and consulting firm’s Distributor Market Index registered annual growth of three percent in third quarter, outperforming the Supplier Market Index’s 0.8 percent growth during the same period. ITR’s Total Members’ Index returned a declining quarterly growth rate of -1.6 percent, and it suggests the business cycle decline will continue into early 2017.
ITR revised its supplier outlook downward from its last report due to a period of slower growth in U.S. retail sales that has lasted longer than expectations. The Supplier Members’ Index should rise into the second half of 2018, however, coinciding with an increase in annual U.S. Industrial Production. It forecasts growth of 4.1 percent for 2017 and 3.8 percent the following year.
Among distributors, growth for the 12 months ending September was up three percent from the year-ago level. Yet, third quarter 2016 was down 1.5 percent from third quarter 2015. ITR revised its distributor forecast downward on lower expectations of business-to-business activity, and it expects an early 2017 low for the sector’s growth rate. It has forecast 2017 growth of six percent and 4.6 percent for 2018.
ITR offers economic information, insight, analysis and proactive strategies, and, in collaboration with PPAI, the company produces data for the promotional products industry to help members improve their businesses. Its quarterly market outlook reports for the promotional product industry contain industry indicators, market analysis, advertising industry forecasts and a promotional products industry forecast. A summary of the third quarter Market Outlook Report is available here.
To access the detailed report in full and to help better capture the state of the industry, become a valued participant in PPAI’s quarterly Market Outlook Survey. Find out how by contacting Mo Das, PPAI Market Research at MoD@ppai.org or Research@ppai.org, or (972) 258-3058.
In June 2015, ITR held a webinar to explain how to use the information within its reports. It also looked at the methodology and terminology of information included in the report, the phases of the business cycle, how to use the information in the planning process, and provided examples of how to use this type of information within a business. The webinar is available on demand here.