According to a new ISA Sign Industry Quarterly Economic Report, the second half of 2019 will be marked with uncertainty and potentially a flattening of several specific industry sectors. But bright spots include a surprising drop in steel prices—well below the 25 percent tariff premium—and lower pulp prices.
The overall global economy faces uncertainty, with struggles in China and Brexit-related concerns in Europe. Closer to home, gross domestic product topped 3 percent in the first quarter, but is expected to weaken throughout the rest of 2019 into 2020.
The sign, graphics, and visual communications industry is expected to face a tightening market in 2019 and perhaps underperform in 2020, the report anticipates.
The report assesses four segments of the industry: two supplier markets (printing and electrical/digital signage) and two end markets (electric/digital signage and architectural signage). It also forecasts commodities. The Sign Industry Economic Report, prepared in June, is sponsored by the National Association of Sign Supply Distributors (NASSD).
The quarterly economic report is compiled by IHS and Vandiver Associates and analyzes each segment of the market upstream and downstream to allow users to stay current with evolving business conditions.
Some highlights:
- Steel prices will remain down through the third quarter of 2019, though the picture for the fourth quarter is unclear. Weakness in demand is driving the market.
- Paper prices also are trending down in the first half of 2019 after seeing rises of 20 percent in 2018. Pulp prices fell sharply.
- The buying advice for the third quarter is to delay lumber purchases for long-term contracts if possible. United States softwood lumber prices will increase in the third quarter due to price spikes for spruce pine and fir from Western North America.
- Digital signage is expected to continue above its historical average on supply and end-user sides while static signage—particularly architectural signage—may struggle.
- In all sectors of the industry, the 2019-2020 outlook fails to show growth and may fall below trend in 2020.
The report is free for ISA, ISA Affiliated Association and NASSD members. Non-members may purchase it for $1,000 per quarterly forecast. This research can be accessed at www.signs.org/quarterlyreport.
