Distributor Sales Jump 4.6% In Q3
North American ad specialty industry distributors increased their revenues by 4.6% in the third quarter of 2013, a total year-over-year gain of $232 million, according to a report released this week by ASI.
This is the 15th consecutive quarter of sales growth for distributors of promotional products. Further, the latest Counselor Confidence Index (CCI) – a measure of industry health – rose during Q3 to a score of 111, a 1.4 point improvement compared to the second quarter.
"Overall, I'd probably say this is the healthiest recent year," said Jeff Becker, president of Kotis Design (asi/244898). "The last year or so has been much better. Some of our clients are definitely spending more, but there are also those clients spending less. The market is stronger, but not amazing."
Large firms (annual sales of more than $5 million) reported an average sales increase of 6.1% in the third quarter, the highest of any group. Distributors with yearly revenues under $250,000 reported a 2.3% average increase in Q3 revenues, up from 1.1% in the second quarter. Nearly half (49%) of distributors reported their third-quarter sales were better this year than in Q3 of 2012.
"The popular answer, I suppose, is that the economy is improving and that is prompting customers to spend more," said Ross Silverstein, president of Top 40 distributor iPROMOTEu (asi/232119), which has grown its sales by 20% in 2013. "Maybe that is partially true. However, another factor may be that distributors, instead of just waiting for the economy to improve, are actually working harder to secure new customers and increase their sales."
Large distributors are the most optimistic about sales, as two-thirds expect their revenues to be higher this year than they were in 2012. Still, optimism among these large firms has faded a bit – in Q2 about 83% anticipated higher 2013 sales. Among all distributors surveyed, 55.2% now believe their 2013 sales will be stronger than their 2012 sales, a modest drop in optimism when compared to earlier this year.
"The spend is in reasonable shape but the margins continue to be challenging," said Dan Craig, general manager of Top 40 distributor Accolade Promotion Group (asi/102905). "Luckily, we are strong in a couple of sectors that are in good shape and are spending. Our numbers are ahead of last year, and we feel confident about the close of 2013."
Akran Foundation Donates $20,000 to Victims of Typhoon Haiyan
The Akran Foundation announced this week that, through its affiliated company, Ottawa-based Akran Marketing (asi/115329), staff members and suppliers will contribute $10,000 in cash and $10,000 worth of clothing to people in the Philippines affected by Typhoon Haiyan. The donations will be through various charities in Canada that are already sending goods to the typhoon-ravaged area.
"It is such a worthy cause that every Canadian should do something for these poor people suffering from a terrible natural disaster," said Raman Agarwal, President & CEO of Akran Marketing. "I am deeply touched by the images coming from Tacloban and Leyte province, where so many people are feared dead."
The Akran Foundation (www.akranfoundation.com) works with children, families and communities around the world to overcome the cycle of poverty, and is a private foundation based in Ottawa.
Akran Marketing is an award-winning branding company and industry leader in providing unique and creative promotional product solutions to the public and private sectors throughout North America. With offices in many major cities throughout Canada, Akran has received several awards including the Better Business Bureau's "Market Place Ethical Award" and was named the "Mid-market Fastest Growing Company in Ottawa."
For more information, contact Monica Channa at (888) 462-5726 or email@example.com.
Bangladesh Moves Toward Minimum Wage Hike
A Bangladesh government-appointed board has approved a recommendation to nearly double the minimum wage in an effort to improve the living conditions of workers in the country's highly-scrutinized garment industry. Minimum wage workers in the country currently make 3,000 taka, or about $38 a month. The board on Monday recommended an increase to 5,300 taka, roughly $68.
Expert observers believe that Prime Minister Sheikh Hasina, up for re-election this winter, will intervene and set the wage level slightly higher than the board's recommendation. While experienced garment workers normally make double and triple the current minimum wage in the Asian nation, a wage hike will likely create an increase in the price of apparel coming from Bangladesh, according to David Bebon, CEO of DBEBZ Apparel. "This is the natural evolution of a developing country," said Bebon, a manufacturer who has been sourcing apparel from the country since 1986. "It's going to help Bangladesh."
Safe working conditions in the country's garment factories have been called into question since the collapse of a factory building in April that killed 1,110 workers. While separate safety accords signed by European and American apparel companies appear to offer the most tangible route for safety improvement, a minimum wage increase will likely not have the same direct effect on working conditions. "There are two different issues here, and they are intertwined because the spotlight is on Bangladesh now," Bebon told Counselor. "My opinion is they are tied together because the unions are smart and they see this as a way to better the life of the garment worker in Bangladesh."
Bangladesh is the second largest apparel exporter in the world after China. Despite multiple accidents over the past year that have led to hundreds of worker deaths, garment exports jumped nearly 25% between July and September compared to a year earlier, according to the Bangladesh Export Promotion Bureau. As the prices to manufacture in China continue to increase, Bebon sees a continued demand for Bangladesh's low-cost manufacturing environment as efforts are made to improve safety measures.
"Bangladesh is not going away," he said. "And manufacturers won't leave Bangladesh right now if there is a labor wage increase."