The PFFC exclusive annual survey on Critical Trends impacting our industry was eye opening, at the very least. The data Penton Research has gathered since our first published Critical Trends survey in 2006 tells quite a revealing story over the course of time as the reader will learn for much of the tracked history. Reflected in the following pages are the results from many of the questions distributed in a survey conducted March 23-April 1.†

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This survey is unlike any other in that PFFC is in the admirable position of being able to solicit meaningful responses across the full breadth of the entire converting industry without bias toward any one segment as most organizational surveys tend to lean. The cumulative results that follow are representative of responses across our industry for the following four converting sectors: flexible packaging; unprinted rolls and sheets; labels, tapes and tags; and paperboard packaging.

Electronic subscribers of our E-Clips e-newsletter can look forward to receiving a quarterly publication of results from this survey, broken out by sector and by question, for the sake of specific comparison. In this way, subscribers in each of these four segments can determine how their performance compares to other converters in their sector.

Expectations for Business Activities: 2009 vs. 2008

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Primary Business

†Survey sent to an effective mailing of 22,141 recipients. Qualified returned surveys from only converters (no suppliers or equipment manufacturers), numbered at 207.

Change in Financial Indicators

Respondent expectations for 2009 reflect the harsh realities of the current economic crisis. More than half (53%) of all respondents expect order size to decrease in 2009; 45% expect volume of orders to decrease; and 30% expect to see less inquiry activity. And almost half (46%) expect to contend with an increase in past due receivables in 2009.

Change in Customers' Revenue & Profitability

Each primary business type was well represented this year in our converter sample. Just under a third of respondents (30%) are employed in the flexible packaging sector; 24% were in unprinted rolls and sheets; 24% in labels, tapes, and tags; and 14% in paperboard packaging. The companies for which the typical respondent works employ an estimated median of 75 employees.

Pre-tax profitability decreased in 2008 for more than half (54%) of respondent companies while less than a third (29%) reported decreased pre-tax profitability in 2007. There was less of a tendency in 2008 to increase selling prices (49% versus 60% in 2007).

The economic crisis has taken a dramatic toll on customers' revenue and profitability with more than half (55%) of all respondents reporting their customers' profitability decreasing along with 52% reporting a decrease in their customers' revenue. This downward trend is particularly remarkable, considering the increases enjoyed in 2006 in both revenue (58%) and profitability (41%).