Healthy. Competitive. Steady.

When Counselor asked distributors for one word to describe the sales environment in 2018, these were the most popular answers. There’s no secret why.

Throughout the year, as the U.S. economy gained steam amid low unemployment, increasing wages and reduced corporate taxes, the promo market benefitted. Following a two-year stretch in which average distributor sales growth hovered around 3%, the ceiling was shattered in the second quarter. Revenue in Q2 jumped by 5.3%, signaling the market was serious about taking a leap forward. Meanwhile, the Counselor Confidence Index, which gauges distributor sentiment, reached an all-time high reading of 117 in Q3. By comparison, when the U.S. was in the throes of a recession in 2009, the reading was 79.

3.86
The industry’s predicted health score for 2019, according to distributors, measured on a scale of one to five.

Marketing spend was up. GDP was expanding. All was well. But by the fall of 2018, things began to change. Opening summer salvos of a trade war between the U.S. and China morphed into a tariff-slinging showdown by September. With costs of imported products from China on the rise, suppliers had to decide whether to pass higher prices onto distributors or eat margin. At the same time, distributors had to hold tough conversations with their customers, warning that tariffs could affect their planned orders.

So it came as no surprise that a few months into 2019, when Counselor again asked distributors to characterize the sales climate, that the responses were different. The most common answer – by a significant margin – was “slow.” Looking to the year ahead, distributors were feeling uneasy about the industry, forecasting a market health score of 3.86. Tracked on a scale of one to five, that figure was the second lowest since 2015. Distributors in only one region – the Southwest U.S. – predicted the industry’s health would improve in 2019.

117
Counselor Confidence Index rating in Q3 of 2018 – an all-time high.

This all leaves the promo sector in an important moment. Overall, the U.S. economy remains a positive. There’s still market share to be won against other ad media. And there’s plenty of room for both e-commerce and relationship-based sellers to thrive, even in the face of stirred up global headwinds.

What’s your greatest advantage in an unsettled market? Information. And that’s exactly what you’ll find in our in-depth SOI report. As you work toward your goals, let the insights and advice on the following pages be your guide – so at the close of 2019, your one-word memory of this year will simply be: success.