Page 54 - FINAT Yearbook 2019

FINAT releases RADAR #11
SIGNS OF A COOLING LABEL MARKET
After last month’s report of slowing demand for self-adhesive label materials in 2018, FINAT’s latest edition of the 6-monthly market monitor, the FINAT RADAR, confirms signs of a cooling label market.
Last year’s consumption of self-adhesive label materials in Europe amounted to a total of just under 7.5 billion square meters, an increase of 1.4% on 2017. 2018 thus continued the signs of slowdown that became evident in the course of 2017, when the market grew by 4.7%, below the average 5% plus annual growth rates that had been recorded since the bottom of the last recession in 2011.
MIXED PICTURE
For the first time since the beginning of the decade, there was a mixed picture of label volume demand growth rates across Europe. Whilst leading markets like Germany and France recorded modest growth rates below 0.5%, several southern and eastern EU markets continued to achieve above average
REPORT &
ANALYSIS:
THE EUROPEAN NARROW WEB MARKET
FINAT RADAR 11 1ST SEMESTER 2019
growth rates between 2.5% and 4%, while emerging markets in Russia and Ukraine recorded strong growth numbers in excess of 6%. By contrast, at opposite ends of the continent. The UK and Turkey recorded negative growth of more than 1% and 4.5% respectively, although towards the end of 2018 and beginning of 2019, the was a pre-Brexit stocking effect in the UK leading to a rebound of labelstock demand.
HEALTHY UNDERLYING FACTORS
Given the strong historic correlation of labelstock demand and GDP development, the slowdown of the label industry is a significant indicator of economic uncertainty, after years of macro-economic recovery. Nevertheless, the prospects for the self-adhesive labels and narrow-web packaging industry remain healthy. In the past two decades, the European self-adhesive label market grew by a factor 2.5, led by the continuous maturing of label markets in eastern Europe, and by innovations in variable information printing technology and high quality product decoration. Eastern Europe now accounts for almost one quarter of the European label market (almost a doubling of its market share in 15 years), whilst high-end filmic label materials are approaching the 30% benchmark of total label materials demand in Europe.
FINAT RADAR 11 HIGHLIGHTS
Edition 11 of the FINAT RADAR was based on a survey carried out among 80 label converters across the different regions in Europe. The results from the survey reflect the above picture, as year over year sales growth is down in most regions, and with 4.9% was the lowest since the survey’s base year 2013. There was also a remarkable shift between 2017 and 2018 in growth rates per top 3 end-use segment. While 2017 was the year of ‘non-prime’ (VIP) label growth, 2018 showed a stronger performance in the prime labelling sectors (with the exception of industrial chemicals). For the first time since start of FINAT Radar, there were declines in some of the segments. Feedback from converters also shows that companies are exercising more caution in 2019, with only 10-15% of participating converters planning to purchase a conventional or digital press this year. Capital equipment purchasing projections are markedly higher for 2020, in case of continued unfavourable domestic and export economic conditions, converter caution may extend into the foreseeable future. Looking at the short term however, the
54 | FINAT YEARBOOK 2019