by Donna M. Airoldi | May 24, 2011

The promotional products industry is seeing brighter days. After a disappointing 2009, in which sales dropped 13.61 percent, the industry looks to have made a turnaround in 2010, with sales growth pegged at 5.89 percent, according to the latest annual “Estimate of Promotional Products Distributor Sales,” released this week by Promotional Products Association International (PPAI).

This increase puts the promotional product industry’s revenues at $16.56 billion, up from $15.64 billion in 2009, its lowest volume since 2002, and leads experts to express cautious optimism for 2011.

“Some market indicators are pointing toward an economic recovery, albeit slowly, for our nation and the promotional products industry, as well. The growth is largely due to the smart business practices of distributors, suppliers, and end-buyers that have set in motion our industry’s recovery,” says CEO Steve Slagle.

Smaller companies with sales less than $2.5 million showed the biggest growth, at 8.86 percent. Larger companies experienced 2.95 sales growth on average. The total number of companies reporting promotional sales decreased by 348, to 21,659.

The total number of online sales grew by 11 percent, for a total of $2.716 billion. That figure is still 6 percent lower than 2008's online sales volume.

Distribution by product category remained relatively the same as in 2009, with wearables significantly leading the way, at 31.13 percent of sales.

There are a few notable shifts, however, in sales by program category, with new product and service introductions jumping the most, from 6.64 percent to 9.13 percent. Other categories showing gains include safety and education incentives, internal promotions, new customer and account generation, employee relations and events, and public relations.