Regional Sales Report: NORTHEAST On the Rebound

27 Jun Posted by in Swag Projects | Comments
Regional Sales Report: NORTHEAST On the Rebound

Northeast: The Rebound Continues

 NE 4 Year Review

The Northeast is rebounding from atmospheric and economic storms quickly. Sales are up a healthy 9%, from $3.2 billion to $3.5 billion.

While the South is number one, as far as total sales volume goes, the Northeast is number one percentage-wise with a 9% increase this time around. What’s more, this is a four-year high, up from $3.1 billion in 2010, the first year we reported regional sales. With industries that are key to promotional products sales rebounding quickly, the region is poised to come out stronger than ever.



New York reached a milestone in November of last year, hitting an all-time high of private sector jobs and seeing unemployment fall to its lowest level since 2009. Job growth in New Jersey was 1.6% in 2013 — lower than the national average of 1.7%, but a marked improvement over the state’s job growth of 1.2% a year before.

Massachusetts added 55,000 jobs in 2013 — its best year for job growth since 2000. In the third quarter of 2013, its GDP grew at an annual rate of 3.5% compared to the national growth rate of 2.8%.

In the CNBC ranking of Top States for Business, Massachusetts improved in most categories for 2013 — most notably in Economy, where the state jumps to third place from 21st. It was named as the top state as far as quality of life on the Forbes Best States for Business list (followed by another northeastern state, Connecticut).

“Clients are finally starting to loosen up their marketing spend,” says Pamela Young, president of Unique Innovations Inc. (asi/348468), based in Lancaster, PA. “If we can just keep that momentum going we will be in good shape.”

Health-care clients remain a major sector for Young, as well as other distributors throughout Pennsylvania. The University of Pittsburgh Medical Center is the state’s largest employer as well as the country’s highest-grossing hospital. The state is also home to the high-grossing University of Pennsylvania Health System and Temple University Hospital, which has helped drive a 1.5% increase to health services and education employment in the state for 2013.

The entire northeast has seen a boost in these sectors, which continue to be major industries for the region’s promotional products sellers. In New York, New Jersey and Pennsylvania, the private educational and health services sector saw the biggest increase in jobs of any industries last year. This is thanks in part to the aging population of the entire northeast region, which has a higher percentage than the national average.

Another bright spot is the leisure and hospitality industry. In New York and New Jersey, this sector saw the second-largest increase in jobs of any industry between November 2012 and November 2013.

Eric Rubin, president of Blue Generation, has seen this growth in hospitality orders first hand, and attributes this to the healing economy. People are traveling more, staying at hotels, and eating out at restaurants,” he says.

Dan Pigott, president of, based in Washington Crossing, PA, has seen strong activity from association groups, including the National Education Association, American Chemical Society and the Society for Human Resource Management.

“This was one of the few markets which performed relatively well during the tough economic times since about 2009,” he says. “But not everyone is aware of the non-governmental ‘association’ market which has also been very active and consistent.”

 NE Sales


While business is coming back in the northeast, it has yet to reach pre-recession levels for some distributors, depending on their client industries and locations. “New England is still tough,” says Win Appel, president of Ad-Merica, based in Shelton, CT. “People don’t feel as confident here as they do in the other parts of the country.”

He points in particular to financial companies, which are major players in his local region of Fairfield County, CT, and have come back strong since the dark days of the recession. But their rebound has not fully been reflected in their spending with his company yet.

“They’re still a long way from where they were 10 years ago,” says Appel. “If they were spending say seven to eight dollars per person, that may have gone down to three or four dollars at the bottom of the market. And things are better now, but maybe just back to five to six dollars per person. We still have a way to go.”

Of all the states in the Northeast, Connecticut is recovering the slowest. The state’s nonfarm employment dropped 0.2% in December 2013. While its unemployment rate continued to decline to 7.4% the same month, this fall is due in large part to the fact that many people have simply stopped looking for jobs. Connecticut currently ranks last in the nation in terms of annual economic growth, with the American Legislative Council ranking it #46 for economic performance and #43 for economic outlook.

While ad specialty sales volume is up to $225 million from $222 million in 2012, that’s still down from $235 million in 2011.

Government spending cutbacks and troubles in the state’s big industries – real estate, financial services, and insurance – are slowing Connecticut’s recovery.

Part of this is emotional, in Appel’s opinion. He has seen a number of clients hold of until the last minute to go ahead with an order, seeming to hesitate to spend, but eventually agreeing to. More customers are ordering just for the next quarter or next month, with less long-term view of how they will be using promotional products for the year.

An additional drag on the Northeast’s rebound are the relatively higher taxes paid by many northeastern states compared to the country as a whole. Business regulation and the move by some financial firms and wealthy individuals out of the region also constrained northeastern business. On the Forbes Best States for Business list, the area ranks as one of the toughest in terms of business costs, with its states taking the 49th (Massachusetts), 48th (New Jersey), 47th (Connecticut), and 46th (New York) spots on ranking of business costs.



Also not helping is the intense and seemingly unending winter the area has faced. The region has been slammed with freezing temperatures and one snowstorm after another throughout the long winter of 2014, disrupting business in the process.

“I’ve had to cancel many calls and appointments because of the weather,” says Tom Monahan, a multi-line rep for Themco LLC, based in southwestern Connecticut. “We haven’t seen as many customers as we’d like to so we can get them up-to-date.”

He had to reschedule a meeting with one client three times until they finally were able to sit down. “Then it started snowing as soon as we sat down for the meeting,” says Monahan, laughing.

These disruptions, however, are temporary and while they create logistical trouble, have not significantly dented business this year. In fact, Young at Unique Innovations says that 2014 is shaping up to be one of the best years in the company’s 11-year history.



Electronic and tech-related products continue to be hits. “Anything that works with mobile devices is popular and selling well,” says Pigott. “Chargers, connectors, holders, adaptors … you name it. Some of these products I refer to as ‘low-tech, high-tech’ – non-electrical items like phone stands or microfiber cleaning cloths.”

He adds that full-color stick-on graphics for floors, windows, doors and even outdoor spots like sidewalks, lampposts and cars, have been performing well for clients. For a recent internal promotion for a client conference, he worked with Hadrus Graphics to create a 30’ by 12’ full color window graphic with an adhesive on top. The entire back side was laminated, turning it into a write-on/wipe-off surface that could serve as a whiteboard in the conference room.

Sturdier tote bags sell well for Young. She also notes an increase in apparel sales, especially at the start of 2014. “I’m not talking about cheap, one-color imprint T-shirts, but expensive jackets and brand names,” she says.

Novelty fabrics are also big, according to Blue Generation’s Rubin. “Our fastest-growing knit fabric is 100% polyester moisture wicking,” he says. “We now offer over 15 men’s and ladies’ styles in the collection including a value moisture- wicking polo at a price under $7.” All have been selling well. Additionally, Blue Generation introduced a cross-weave fabric for its woven shirts, which creates a two-toned effect and texture, giving it an upscale look.

But while the quality of clothing is rising, the sizes are also increasing. This year, Blue Generation introduced a ladies’ “Swing Shirt” that flares out at the bottom, “offering women a bit more room where it may be needed,” according to Rubin. “And even a slim person looks fashionable in the style.”

Gerry Barker, president of Barker Specialty Company, also notes a growing expectation of quality, with less concern about specific price points. “Our Fortune 500 customers are really insistent that the products are packaged well, perform well, and reflect their brand,” he says. “We might lose an order due to price, but we never lose a customer due to price — you can lose a customer due to quality, though.”

While distributors offering “low-margin, low-quality” can gain business over the short term, Barker warns against it for long-term success in the region. “The USB charger shouldn’t overheat, the jacket should zip up and down repeatedly without ripping or getting stuck,” he says.