Spread the Word: Promotional Products in Canada Industry Market Research Report Now Available from IBISWorld

The Canadian Promotional Products industry will get a boost during the global economic recovery, when improvements in corporate profit and sentiment are expected to create renewed demand for marketing budgets and related promotional products. For these reasons, industry research firm IBISWorld has added a report on the Promotional Products industry to its growing industry report collection.

IBISWorld estimates that revenue for the Promotional Products industry has increased at an average rate of 0.9% to $1.7 billion in the five years to 2013. Stronger industry growth was hampered by the recession, which caused revenue to fall 5.2% in 2009 as “clients reduced marketing budgets to maintain profit margins,” explains IBISWorld industry analyst Kevin Culbert. “Nevertheless, the industry has experienced overall growth due to a return of advertising budgets.” Similar to the industry, spending on advertising dropped during the recession, but has been growing since. In the five years to 2013, total advertising expenditure is expected to increase 1.4% per year on average.

The majority of industry revenue is generated through the distribution of specialty advertising products. Operators specializing in this service do not manufacture products; they purchase “blanks” from industry suppliers and customize them according to client needs. “Unfortunately, industry globalization has made it easier for clients to go directly to the manufacturers, skipping industry firms altogether,” Culbert says. In addition, consumer safety laws, such as the Canadian Consumer Product Safety Act (CCPSA) of 2011, have increased the cost of insurance and product testing. Increasing costs over the past five years, combined with slowed demand during the recession, have squeezed industry profit margins. These trends have caused the Promotional Products industry to experience some consolidation and pushed some firms out of business.

This industry has a very low level of concentration, consisting of a large number of small operators that focus services on local and regional markets. One reason for the low concentration is the localized nature of many services that the industry provides, including window dressing services and mannequin decorating. Accounting for the largest share of revenue, the distribution of advertising specialties is the only service that is often completed on a large scale.

During the five years to 2018, industry operators will continue to experience increasing competition from consumer product manufacturers. Furthermore, industry operators will have to contend with the industry’s increased regulation under CCPSA, which includes all consumer products that are manufactured, distributed or sold in Canada. Increased regulation and competition are expected to limit profit margins to below prerecession levels.

This industry provides promotional products, such as key chains, magnets and pens. It also provides a variety of advertising-related services, including promotional product distribution, sign lettering and window dressing. This industry does not include: advertising agency services, public relations agency services, media buying agency services, media representative services, display advertising services, direct mail advertising services and marketing consulting services.


PRWeb/ Midland Daily News


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