Packaging Industry was effected badly during the economic crisis.Packaging sales in the US and Europe plummeted to record lows in the final quarter of 2008, as most manufacturers reported sales declines of up to 20%. Companies are projecting negative growth throughout 2009.
Asia’s packaging sales also dropped, though by an average of 5.6% - a reverting to pre-2006 levels, reversing the region’s recent high growth rates. Most developing Asian countries will not dip into recession in this crisis.
This, according to the interim findings of a global industry-wide survey “Economic Crisis - Impact on the Packaging Industry” from packaging industry analysts at PackWebasia.com.
According to the report’s publisher, Stuart Hoggard, “Despite the various government stimulus initiatives, the international financial crisis and collapse in global trade will continue to devastate the Western world’s packaging sector throughout 2009 with some recovery seen in 2010.”
The immediate result will be across the board tightening of the job market in the US and Euro Zone with significantly reduced capital investment, according to the initial findings of the report which canvassed more than 550 companies worldwide across the packaging supply chain.

Highlights from the survey
Sales projections for the first half of ‘09 show continuing downward trend. 
The rate of decline will ease slightly in North America and the Euro Zone; most companies project negative growth of below -2% to -5%.
Asia will decline to +8%, down from averages of +11%
A minority of manufacturers project sales growth of more than 40%. Again, Asia will be the main beneficiary.
Headcounts Frozen

Most companies report flat headcounts throughout 2009-10
Significant number will be slashing staff – mostly by about 5%.
A minority of the hardest hit firms anticipate more than 40% of jobs will be lost. 
A small proportion say they plan on hiring in 2009; again, confined mainly to the Asian region.
Capital Equipment
More than half of all packaging producers reported a capital expenditure freeze - no investment plans through 2010.  Contribute!

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Of those that have ’09 capital expenditure plans, only 10% have budgeted more than US$2 million.
Converting equipment tops the shopping list, followed by printing presses (digital, offset, flexo and gravure). Other equipment purchases being budgeted for include labelling, prepress, CAD/CAM, inspection, filling & sealing, extrusion and moulding machinery.
Brand Owners Increase Investment

In Asia, the impact of the crisis has been less pronounced than in the West and company projections going forward to 2010 show Asian producers being more bullish about growth.
“Our findings suggest that there are two different Economic Crises occurring simultaneously. The profile of the Asian Crisis is altogether different from the West’s experience,” says Hoggard.  “Asia is suffering a crisis of market collapse rather than a shutdown of financial and credit systems.
“The region’s traditional export markets collapsed in September ‘08, but by continuing to fulfill orders placed before the crash, Asia was cushioned from the initial shock. By December ‘08 factories from Bombay to Beijing faced empty order books as many customers faced liquidation.”
However, this is proving a temporary setback for the Asian packaging sector. The Asian economies will contract, but the region as a whole will not dip into recession and will instead refocus on exploiting and consolidating untapped domestic consumer market potential.

News From PackWebasia.com
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