In the fast-paced world of business, labels might not be the first thing that comes to mind. However, in our industry, labels serve as a barometer for economic activity and consumer behaviour. Right now, we’re observing a dip in demand for labels, and it’s raising some important questions about the current state of the economy.
The Pulse of the Label Industry
According to Guru Labels founder Nick Lowe, the label business feels unusually soft. Conversations with industry insiders reveal a similar trend—business is down by about 20%. “At this time of year, we typically experience a surge in orders as businesses prepare for the holiday season. Phones would ring off the hook, and emails would flood in. This year, though, it’s noticeably quieter”.
“Historically, we’ve noticed that the approach of an election in Australia tends to apply the brakes on business activity”, says Nick. This phenomenon is likely linked to uncertainties surrounding potential changes in government policies, which can make businesses and consumers hesitant to spend.
The Label-Economy Connection
The drop in label production is not just a sign of decreased manufacturing activity; it’s a window into consumer behaviour. Nearly every item we purchase, from groceries to cosmetics, requires a label. When sales slow, so does the need for these labels. It’s a simple yet profound connection—when people buy less, labels are less in demand.
Interestingly, while many sectors are feeling the pinch, industries tied to housing remain unchanged in their demand for labels.
Conversely, smaller retail shops and cafes—the places where you’d indulge in a luxury coffee or treat—are struggling. For many, these items are the first to go when budgets tighten. The “mama and papa” businesses have lowered their label quantities, as consumers prioritise essentials over indulgences.
What Does This Mean for Christmas?
Label production around this time of year can predict how businesses will fare during the holiday season. Last year, we were overwhelmed with orders in preparation for Christmas sales. This year, the slowdown suggests a more cautious approach from both businesses and consumers. Will we see a late surge, or is this the new normal?
Looking Ahead
The current state of the label industry offers critical insights into consumer behaviour and economic trends. It’s a call to businesses to remain agile and prepared for shifts in consumer spending habits, especially in uncertain economic climates.
Guru Labels offers businesses free quotes on label orders, so they can see what they can save. It is possible to have a great-looking label for less if you partner with the right team. Every saving adds up when you’re trading through a softer economy.
