On the back of a 7% sales rise last year to a record volume of 8.5 bn m², European self-adhesive labelstock consumption slipped 2% in the first half of 2022 compared to the year-earlier period.

The decline versus the past two years – revenue was up 4.3% in 2020 – was driven by the collapse of demand for paper roll label materials, especially in April-June of this year, when consumption fell by 8.3% year-on-year, according to Netherlands-based industry association Finat (The Hague; www.finat.com).

First-half sales of filmic roll label materials increased a modest 2.2%.

Explaining the slide, Finat said the strong label economy of the preceding two years was “heavily influenced” by higher demand for essential goods and services after the outbreak of the coronavirus pandemic in 2020 and by rapid economic recovery in 2021.

Since the summer of 2021, global manufacturing chains have been suffering from supply chain disruptions caused by pandemic-related adjustments, the trade group said. This, it noted, has led to a “growing gap” between booming post-pandemic demand and the shrinking availability of energy, raw materials, components, chemicals, production, labour, and transport capacity.

In the first half, the European label industry also was hit by a prolonged strike at Finnish paper manufacturer UPM. During the more than three-months of supply constraints, a number of products were available only on allocation.

Some of the downturn on the paper side may have been absorbed by the upturn in filmic label demand, the association suggested.

The latest edition of Finat Radar, the group’s biannual market survey, showed that 60% of participating companies polled this past spring had forfeited sales due to supply chain issues. Strike-related backlogs are unlikely to dissipate before this autumn, the industry association predicted.

At present, the outlook for the European labels sector is subdued. Exponential increases in energy prices, raw materials costs, and, ultimately, record consumer price growth (see Plasteurope.com of 01.08.2022) are eating into disposable household incomes, while the “dark clouds of the horrific war in Ukraine” are not expected to dissipate anytime soon, Finat concluded.