The UK’s label printing industry is under pressure and in decline according to research from self adhesive labels organisation Finat.
The pan European association represents producers of self adhesive labels materials and produces the Radar report to show trends in the market. And for 2018, this reported a decline in demand of more than 1% from UK converters. Towards the end of 2018 and at the start of this year, Finat says there was something of a rebound due to pre-Brexit stock building.
Overall growth rates in Europe’s self adhesive labels sector is slowing according to Finat. There were 7.5 billion square metres of materials sold in 2018, a rise of just 1.7% on 2017 which was 4.7% higher than in 2016 and below the historic average which has been above 5% since the end of the last recession in 2011.
The results are uneven across the continent. Major markets of Germany and France showed growth of just 0.5% while rates in Eastern Europe where above the average at 2.5-4%. Russia and Ukraine where higher still at more than 6% growth. The decline in sales in UK was exceeded by Turkey where there was a 4.5% drop in demand.
Nevertheless the UK remains the second largest market across Europe, second only to Germany and ahead of Italy, France and Spain. German demand reached 1.2 billion square metres with the UK 25% below this at 900,000 million square metres.
Finat also uncovered changes below the top line numbers. There was stronger growth in personal care, pharmaceutical and household chemicals while total demand in the automotive and retail segment was down while growth rates in other sectors (beverage, food transport and industrial chemicals) slowed.
This cooling of the growth rates links to greater caution in investment plans. Only 10-15% of converters are planning to invest in press capacity this year. This might be affected by the upcoming Labelexpo show in September, especially as investment intentions for 2020 are markedly higher after a visit to see the latest technology in Brussels.
That show is going to feature a strong presence of mid web presses from label press providers that can be used for flexible packaging. Around 35% of those surveyed say that they are already active in flexible packaging and 25% involved in shrink sleeves or wraparound labels.
Many are also interested in the developing linerless label and pouch markets.
By Gareth Ward
Demand for labels across Europe is still growing, but not at the rates it has enjoyed in recent years. The UK suffered a dip, though there appears to have been a bounce back in the early months of this year.