Following an uneven first quarter for the U.S. economy, a host of distributor executives are forecasting a rosy Q2 for the ad specialty industry. “We’re going to benefit from a spring and summertime push as people come out of hibernation from this dreadful winter,” said Larry Cohen, CEO of Axis Promotions (asi/128263). Cohen’s company enjoyed an 18% sales jump in the first quarter of 2015, and is projecting similar numbers for Q2.
Axis isn’t the only distributor expecting healthy growth. Proforma (asi/300094) forecasts its sales to go up between 10% and 15% in the second quarter, according to Greg Muzzillo, company founder. And Mark Ziskind, chief operating officer of Caliendo Savio Enterprises (asi/155807), predicts the industry as a whole will be up 3% to 5% in Q2, with his own firm posting at least 8% higher sales figures. Decorator Howard Potter, of A&P Master Images (asi/702505), saw a 50% sales jump in Q1, despite it traditionally being the shop’s slowest season, and expects to rack up at least $360,000 in revenue in the second quarter.
Though executives were positive regarding the industry’s health, they expressed some reservations about the overall global economy, with a strong dollar and lower oil prices having potentially negative effects. Analysts, in fact, believe Q1 U.S. GDP was up just slightly after an extended period of gains. “Even though the U.S. economy is expected to have moderate growth, other major countries are struggling and dragging down our exports,” said Memo Kahan, owner of PromoShop (asi/300446). Ziskind added UPS’s new pricing structure and healthcare to the list of 2015’s challenges. Potter, however, sees a challenge from within the industry itself, with certain cut-rate competitors “promoting the ‘who can be cheaper?’ special,” at the expense of quality and sustained profits.
For Muzzillo, many of the large-scale economic challenges don’t apply to the ad specialty industry. “Since we don’t have significant market share, the biggest economic challenge going forward is for people who think there’s an economic challenge,” he said. “My advice would be, ‘Put down the newspaper, and go grow your business.’”