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Europe’s label industry looks at possible 7 percent decline

June 22, 2009

The FINAT forecast is based on changing consumption of pressure sensitive labelstocks.

Signs are emerging that the economic recession is bottoming out, as far as self-adhesive labels are concerned – but the European industry could face the prospect of a 7 percent fall in output in 2009. That’s according to a forecast by FINAT, the Europe based label association, which held its annual congress recently in Turkey.

Speaking at the event, FINAT Managing Director Jules Lejeune said that the performance of the industry during the second quarter of this year will be crucial in determining the actual level. He expects a “significantly” improved picture in a year’s time.

Each year Lejeune presents figures on the consumption of pressure sensitive materials throughout Europe. This year, he said, drawing a true picture of the effects of the recession on the basis of the first quarter is difficult, because year-on-year comparisons give a false picture: The first half of 2008 was buoyant albeit decelerating, which exaggerates the double digit fall in year by year comparisons. “We cannot take these figures as indicative for the year as a whole.

“Assuming that demand for labelstock will remain the same as in the first quarter of 2009, that would give us a decrease in output of around 7 percent overall for 2009, compared with the 5.35 billion square meters consumed in 2008 all over Europe,” Lejeune said.

Only the Central European area showed a positive growth in sales in 2008 – and then only by a marginal 0.1 percent – with the UK and Ireland seeing sales fall by 8.3 percent, and Southern Europe seeing a 3.2 percent fall, Scandinavia going down by 2.7 percent and Eastern Europe receding by 2 percent. On balance, in spite of a positive first half, labelstock demand for all regions and products concerned in Europe declined by 2.8 percent in 2008.

Paper roll labels, which account for 70 percent of the market, took bigger hits than their non-paper equivalents. Declines in paper roll sales last year were 12.1 percent in the UK and Ireland, 4.7 percent in Scandinavia, 4.5 percent in Southern Europe, 1.7 percent in Central Europe, and 1 percent in Eastern Europe. Non-paper rolls sales only saw a 0.5 percent decrease in Eastern Europe, with Scandinavia seeing a 7.2 percent increase, the UK and Ireland improving by 5.2 percent, South Europe up by 2.8 percent, and Central Europe improving by 1.5 percent.

While Lejeune anticipates a seven percent fall in 2009 (based on an assumption that the three remaining quarters will show no change), he stressed that only time will tell the extent of negative growth. In the first quarter of 2009, regional variances showed Scandinavia receding by only 2.1 percent but Southern Europe taking a 16.1 percent hit. Central Europe went down by 9.3 percent, Eastern Europe saw an 8.6 percent fall, and the UK and Ireland were 5.1 percent worse off.

“The positive news is that having reached rock bottom there is no way but up,” he added. “I am convinced that the dynamic entrepreneurial and innovative spirit that has always characterized this industry will be instrumental in eliminating the present doom and gloom and that I will be able to present a significantly different outlook 12 months from now.”

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