Business confidence has returned to the self-adhesive label sector in Europe although total demand is still showing a decrease over the equivalent period of last year, according to a new survey conducted by FINAT, the European label association.

The Trend Survey for the third quarter of 2009 confirmed the return of business confidence, but also indicates the volatility that the industry has been faced with during the last two years, according to Jules Lejeune, FINAT’s managing director.

After a dramatic all-time low in the first quarter of 2009 in all sectors, the business climate has returned to positive figures in the third quarter of 2009. “This is encouraging, but in day-to-day trading, label producers are still seeing a reduction in demand – as is to be expected in the economic conditions we have seen in the last year,” Lejeune says.

Total demand for self-adhesive label materials in Europe decreased by 1.7 percent in the third quarter of 2009, compared with the same quarter of last year. Although still in the red, the decrease is lower than the minus 11.6 percent (Q2) and minus 12.1 percent (Q1) year-on-year recorded for the previous two quarters.

“It should be realized, however, that the crisis first hit our sector in the third quarter of 2008, and the first two periods of that year were still buoyant,” Lejeune adds. “The slowdown of the deceleration pace in our sector confirms cautious signs of economic recovery that have become evident since the summer.”

For the year to date, total labelstock demand in Europe was 8.3 percent below the levels recorded in the first three quarters of 2008. This figure corresponds with decreases of 7.5 percent in paper roll demand, 6.1 percent in filmic roll demand, and a dramatic downturn of 22.9 percent in sheets.

Compared with the third quarter of 2008, filmic rolls have taken the lead in the return to positive year-on-year growth rates. Regionally, the recovery appears to be driven by demand in Eastern Europe, although the source of this growth lies mainly in the countries outside the European Union, which were hit earlier by the crisis in 2008.