On the last day of The Expo, PRINTING United Alliance Chief Economist Andy Paparozzi shared some results from the 2022-23 State of Apparel Decoration Survey. Results from the industry survey shed light on what apparel decorators are experiencing, and what they expect next year.

Paparozzi stressed that this is only the beginning for the survey and that 73 participants for its debut is a great start.

Key Takeaways

  • Of the apparel decorators surveyed, 46.3% have diversified beyond apparel decoration.
  • Of that group, 46.8% added graphic and sign production; 34% added promotional printing.
  • On average, sales increased by 14% during the first three quarters of 2022.
  • Over that same period, operating cost inflation averaged 12.6%.
  • Rising costs are squeezing margins: 67.1% reported sales increased through September; 40.6% reported pre-tax profitability increased.

About the Participants

Looking at the 73 respondents, Paparozzi shared their sales stats:

  • Annual sales range from $250,000 or less to more than $20 million
  • 6% have sales greater than $1 million
  • 4% have sales great than $3 million

Looking at decoration methods offered, this is the breakdown for survey participants:

  • Screen printing – 92.1%
  • Embroidery – 77.8%
  • Heat transfer vinyl – 66.7%
  • Direct-to-film (DTF) – 39.7%
  • Direct-to-garment (DTG) – 31.7%
  • Sublimation – 23.8%
  • Custom cut/sew – 12.7%
  • Other – 9.5%

Diversification

The survey also asked participants about diversification and if they’ve stepped into any other printing or production segments. Almost half (46.3%) have diversified, and

46.8% of those that diversified reported they’ve expanded into graphic and sign production, while 34% of respondents said they also offer promotional printing in addition to apparel decoration. Respondents have also expanded into:

  • Commercial printing – 17%
  • Functional printing – 12.8%
  • Package printing/converting – 4.3%
  • Other – 4.3%

Sales, Costs, and Prices

Looking at sales, costs, and prices and the change over the first three quarters of 2022 compared to the year earlier, a majority of respondents (67.1%) reported they were able to raise prices to at least pass some of the increased cost of operations. At the same time, 81.9% said prices slightly increased and 87.5% reported cost inflation.

Looking at these numbers, Paparozzi said margins are under pressure due to a substantial broad increase in operating costs.

Biggest Concerns for 2023 (First Half)

The top three biggest concerns for apparel decorators in the first half of 2023 are:

  • Rising consumable costs – 72.3%
  • Rising labor costs – 69.8%
  • Rising energy costs – 63%

Capital Investment

When asked if apparel decorators would invest in equipment, hardware, or software, more than half (67.3%) said they planned to, 9.1% said no, and 23.6% said they weren’t sure.

So why the hesitation for that 23.6%? Respondents said they:

  • Are concerned/uncertain about the economy – 84.6%
  • Are concerned/uncertain about business conditions in the market – 61.5%
  • May not have the cash or access to credit needed to invest – 30.8%

Increase Profitability

To increase profitability, apparel decorators plan to:

  • Increase prices – 66.1%
  • Control costs more effectively – 57.1%
  • Increase productivity through employee training, recruitment, retention, etc. – 57.1%

Benefits and Compensation

The 2022-23 Wages, Salaries, and Benefits Survey, conducted in June/July 2022, surveyed companies across The Alliance, with 38 participants identifying as apparel decorators. Of those 38, they offer the following employee benefits:

  • Holiday pay – 94.4%
  • Vacation/personal time – 91.7%
  • Paid sick leave – 91.7%
  • Workers’ compensation – 75%
  • Medical insurance – 72.2%
  • Unpaid sick leave – 55.6%
  • Unpaid vacation/personal time – 50%
  • Retirement plan – 47.2%
  • Bereavement – 47.2%
  • Dental – 41.7%
  • Vision – 33.3%
  • Group life insurance – 22.2%
  • Parental leave – 22.2%
  • Wellness – 11.1%
  • Tuition Reimbursement – 11.1%
  • Short-term and long-term disability – 8.3%
  • HSA – 8.3%
  • FSA – 5.6%

Next Steps

  • Conduct State of the Decorated Apparel Industry Survey again in spring 2023 and issue a midyear update.
  • Paparozzi hopes to increase the number of participants to 150.