“Freedom will always triumph over tyranny,” Biden said. “President Putin thought he could roll into Ukraine and the world would roll over. Instead, he met a wall of strength he never imagined.”

After a long two years, it was something (nearly) everyone in the room could agree on.

Familiar with the ritual of speechmaking, Biden knows what’s at stake. There will be 34 U.S. Senate elections in November, but only nine Senate races will decide who controls the Senate — and Biden’s agenda. Both Democrats and Republicans are paying close attention to the swing states of Arizona, Georgia, Florida, Nevada, New Hampshire, North Carolina, Pennsylvania, Ohio and Wisconsin. Democrats are playing defense in four of those states, while Republicans seek to keep five more.

As it stands, Democrats barely hold the Senate. The chamber is divided 50-50, with Vice President Kamala Harris serving as a tiebreaker. Although the Ukraine emergency gave the two parties a common cause, at its core is a deeply divided Senate. Republicans are hoping to capitalize on voter concerns about spiraling inflation, and analysis shows the current landscape is tipping in their favor.

According to The Cook Political Report with Amy Walter, a recent Marist/NPR/PBS poll found that 36% of adults and 37% of registered voters approved of Biden’s handling of the economy; 58% in both groups disapproved. The Fox News poll of registered voters showed 37% approval on the economy and 61% disapproval. ABC News/The Washington Post had 37% approval, 58% disapproval. Perhaps, then, it’s no surprise that an ABC News poll from February found that Republican congressional candidates have a seven-point edge over Democratic ones among registered voters.

As Charlie Cook of The Cook Political Report pointed out, the economy is so important to people that it is likely to “color their answers on that president’s handling of almost any issue, related or not.” Biden talked about the economic growth, job creation, infrastructure investment and wage gains that occurred under his watch (we’ll cover these more extensively in the sections that follow). However, the president’s address marked the start of a politically motivated push to reframe his domestic agenda toward addressing rising prices of, well, everything, and staying ahead of the pandemic, among other priorities.

“I get it,” Biden said in an appeal to voters (and centrist Democrats). “That’s why my top priority is getting prices under control.”

From the COVID-19 pandemic and economic aftermath to supply chain issues and labor concerns, there’s a lot to unpack about Biden’s inaugural year and much more to consider going forward. The mood of Biden’s address may have been unified, but the mood of the public is uncertain, even frustrated. Print and promo companies can certainly relate as they search for clues about a possible return to normal conditions. Mainly, when will it happen?

We hope to provide some clarity in Print+Promo Marketing’s 2022 State of the Industry report. Below are the five areas we’re covering. Click each link to jump to that section. For our supplier panel, featuring feedback from print and promo suppliers on four main areas impacting the industry, read on to the midsection of this report.

In addition to the stimulus checks and unemployment benefits, the original relief package included funding for the state and local governments, a national vaccine program and more. The final version was missing the proposed federal minimum wage increase to $15, but, nonetheless, the relief package represented a huge step toward economic recovery for the U.S.

A Wall Street Journal economic forecasting survey of 60 economists agreed that the gross domestic product (GDP) could grow by approximately 5% in 2021, owing in part to the aggressive vaccine rollout. (To provide perspective, that’s likely higher than any annual increase seen since 1984.) At the time, Lisbeth Lyons, vice president of government and political affairs for PRINTING United Alliance, Fairfax, Virginia, told Print+Promo Marketing that vaccinations could influence consumer behavior and a return to business travel and attendance at mass gatherings, like concerts or sporting events — some of the hardest-hit verticals that the print and promo sector serves.

It was the boost print and promo professionals needed after deep cuts in 2020. “If one thing hasn’t changed about our industry, it’s our dependence on the economy,” remarked Andy Paparozzi, chief economist for PRINTING United Alliance.

By the Alliance’s preliminary estimates, total printing industry sales (all sources) rose 7.2% to $78.9 billion, in 2021, after declining 12.3% in 2020, still leaving them 6.2% below pre-pandemic levels. But COVID caused extraordinary damage to supply chains and labor markets beyond what any of us has ever seen. Vaccines did their job in protecting against severe disease, though they couldn’t stop the spread of the Delta variant or its highly contagious successor, Omicron.

Had supply quickly caught up with demand, inflation would be transitory. But it didn’t, Paparozzi said. The result is inflation embedded in the economy via “sticky” prices such as rents and wages, as the growing number of companies offering cost of living adjustments shows. This presents two big problems.

“Embedded, persistent inflation slows the economy by eroding real purchasing power, consumer confidence and consumer spending, [the latter of which] accounts for nearly 70% of GDP,” Paparozzi said in the Alliance’s “State of the Industry Update, 1st Quarter 2022,” sponsored by Konica Minolta. (It is important to note that an early February reading showed the University of Michigan Consumer Sentiment Index was down 19.7% from February 2021 — also the lowest a reading has been in a decade.)

“[Second,] the Fed is chasing inflation for the first time in 40 years,” Paparozzi continued. “They are playing catch-up. Playing catch-up increases the odds of a policy error.”

According to the Bureau of Labor Statistics, the U.S. consumer price index rose 7% last year, the largest spike in 40 years. Americans are seeing it firsthand at gas pumps ($7 per gallon in California!), at grocery store checkout lines and in their energy bills. The invasion of Ukraine might not cause a global economic crisis today, but economists are concerned for the future. So, can the print and promo industry see growth in 2022? That depends.

“The view of what’s ahead is obstructed by extraordinary uncertainty about how far the Fed will go to loosen inflation’s grip on the economy; how much factors ranging from the truck driver shortage to China’s zero tolerance for COVID will delay the mending of global supply chains; how tensions in Ukraine will play out — [now that] Putin has invaded, [what if] oil goes to $125-plus per barrel? — etc.,” Paparozzi speculated. “Our preliminary forecast is for total printing industry sales to increase 3.9% to 4.5% this year. However, we expect growth not to accelerate, but to slow appreciably after mid-year as the burden of persistent, embedded inflation slows the American economy.”

In his State of the Union address, Biden conceded that inflation is undermining America’s economic boom, and laid out his plan. Part of his strategy included a “Made in America” approach.

“Lower your costs, not your wages,” Biden urged companies. “Make more cars and semiconductors in America. More infrastructure and innovation in America. More goods moving faster and cheaper in America. More jobs where you can earn a good living in America. And instead of relying on foreign supply chains, let’s make it in America.”

One of the executive orders signed early-on in January 2021 pertained to Made in America, designed to increase the amount of federal spending on products made by American companies. To deter rampant Made in USA fraud, the Federal Trade Commission (FTC) recently finalized a new rule that tightens what this means for marketers. Under the rule, which applies only to labeling claims, marketers making unqualified Made in USA claims on labels should be able to prove that their products are “all or virtually all” made in the United States.

Defining “all or virtually all” is where it gets tricky. The FTC offered extra guidance:

1. Final assembly or processing of the product marketers making unqualified Made in USA claims on labels occurs in the U.S.
2. All significant processing that goes into the product occurs in the U.S.
3. All or virtually all ingredients or components of the product are made and sourced in the U.S.

When asked how Biden’s Buy American stance may affect the print and promo industry, Marcia Y. Kinter, vice president of government and regulatory affairs for PRINTING United Alliance, brought up textiles.

“You have a lot of textile items that tout the Made in the USA claim,” she said. “So, now, you’re looking at truly cracking down on that, because now you have other agencies that are having a requirement to buy American, which is a policy, and made in America, the Biden administration is looking at how that impacts the small and medium-sized business industry.

“What needs to be understood is this also looks at domestic sourcing, it looks at buying domestically,” she added. “So, it is a trickle-down even for the print and promo sectors if companies are starting to look at what does this mean for Buy American? Oftentimes, I think it takes a while to get down to the print and promo sector, but I think eventually it’s going to hit us.”

She also recommended print and promo companies research how their customers promote themselves online. “If they say on their website, ‘We Support Made in America,’ ‘We Support Buy American,’ ‘We’re Looking at XYZ,’ then you can utilize that and go back and talk to them about ‘Hey, well I’m a U.S. company, and for your marketing and your promotional items, don’t you also want to follow this policy?”

Under the new guidelines, more than 70% of the U.S. population is in an area with “low” or “medium” COVID-19 community level and masks are not recommended for the general public. Furthermore, the CDC reported that approximately 70% of the population is either vaccinated or exhibits natural immunity caused by previous COVID-19 infections.

From a pandemic perspective, this is arguably the closest we’ve gotten to a return to normalcy. But it’s still too soon to declare the pandemic over. Biden, no doubt humbled by the Delta and Omicron variants, took a more realistic approach with his speech this time around. “I cannot promise a new variant won’t come,” he said. “But I can promise you we’ll do everything within our power to be ready if it does.”

The president called for adults and children to get vaccinated, for production and distribution of antiviral pills to protect vulnerable populations, and for workers to “fill our downtowns” and to keep schools open. So, what does this mean for businesses — especially essential print and promo companies — trying to sort through the shifting messages? Kinter was direct: “They need to put their response plan in place.”

This is one of the biggest regulatory issues Kinter has been monitoring, because it changes so quickly. She encouraged print and promo companies to educate themselves on what’s going on, not only at the national level, but more specifically the state level — information that the Alliance provides to members. Admittedly, many states did nothing beyond what their public health department required; others, like Michigan and New Jersey, were more active, issuing executive orders.

Virginia, the first state to implement workplace health and safety standards for COVID-19, is now poised to roll back its requirements. If the Permanent Standard is repealed, employers no longer have to require masking indoors, enforce social distancing, maintain ventilation systems, report COVID-19 cases to the Virginia Department of Health or provide COVID-19 training to employees. Then there’s New York, whose Commissioner of Health just extended the New York HERO Act (initially due to expire Feb. 15) to March 17, 2022. That means New York employers must continue to implement their safety plans, including daily screening of employees working onsite.

Kinter is also watching California. When she spoke to us, the state had an Emergency Temporary Standard in place set to expire the beginning of April. Just a week later, Governor Gavin Newsom signed an executive order declaring, effective March 1, “masks are no longer required for unvaccinated workers indoors, but will be strongly recommended for all individuals in most indoor settings.” Additionally, employers must still provide a face covering upon request of an employee. This order extends the current Emergency Temporary Standard through May 5, 2022.

“It’s a really shifting landscape, and one that I think any industry needs to pay special attention to because you’re looking at what is the requirement on the business?” Kinter said. “How do you report a COVID-19 case? You know, you really get down to the fundamentals looking at these issues. Do I have to require face masks? Is it PPE? Do I have to train [staff] on face masks? Do I still need to maintain social distancing in the workplace, which, oftentimes, is quite difficult in the print and promo sectors?”

At press time, the Occupational Safety and Health Administration (OSHA) had not responded to the CDC’s revised guidance. As Gary Jones, director of environmental, health and safety affairs for PRINTING United Alliance, explained, OSHA typically follows the CDC’s guidelines and incorporates them into their recommendations.

“OSHA does not yet have a regulation to address infectious diseases, but indicated that it was going to develop one considering the pandemic and the recent court cases which halted their effort to issue an Emergency Temporary Standard requiring mandatory vaccinations of employees,” he said.

On Dec. 19, during an appearance on “Fox News Sunday,” Sen. Manchin delivered a death blow to the domestic initiative when he announced he could not support the bill. And just like that, an infuriated White House was left scrambling to salvage what had been a top priority.

As Lisbeth Lyons noted in her article, “Build Back Better Crumbles: What’s Next for Biden and Congressional Democrats?” Manchin’s move may have left printing and packaging companies breathing a sigh of relief. An end to Build Back Better meant escaping new tax hikes, increased costs of environmental operations, and regulatory fees and penalties (such as a tenfold dollar increase in OSHA citations), she said.

Biden used his State of the Union address to tout the many provisions he hoped to resurrect, never once using the phrase “Build Back Better.” Among the initiatives he’d like to salvage are expanded childcare, universal pre-K, national paid family leave and long-term home healthcare. Sen. Manchin’s proposed changes in a scaled-down version of the agenda leave these out. Instead, he believes the country should “get its fiscal house in order.” But for many families, these issues are economic issues.

“What we’ve learned with this pandemic is that there’s no one there, there’s no safety net when your childcare provider isn’t available anymore,” said Adriane Harrison, vice president of human relations consulting for PRINTING United Alliance. “Then, it’s a decision about do I have a job, or do I take care of my family? And, of course, the answer is always going to be take care of my family.”

As Biden tells it, the job market is flourishing. “In my first full year as president, the economy created 6.6 million new jobs … 6.6 million,” he said during his State of the Union address. “That’s never happened before in American history. And that includes 375,000 manufacturing jobs. 2021 saw the highest increase in U.S. manufacturing jobs in nearly 30 years.”

But here are some other numbers to consider. In December, 4.3 million Americans quit their jobs, down slightly from the record 4.5 million in November, according to the Bureau of Labor Statistics. Harrison said the Great Resignation that we hear about generally applies to low-wage workers who are tired of being low-wage workers. With the job market currently in their favor, they move on to higher-paying positions. Other times, employees don’t look for a new gig because of the life obligations mentioned earlier — or they’re reassessing their priorities in the age of COVID.

The print and promo industry is no stranger to skilled labor shortages, and the pandemic hasn’t done hiring managers any favors. Though we’d be remiss not to mention that the print industry’s labor numbers trended positively between 2020 and 2021.

“Printing industry employment decreased by 2,800, or 0.7% last year, to 375,000, after decreasing by 47,300, or 11.1%, in 2020, according to the U.S. Bureau of Labor Statistics,” Paparozzi said. “However, the declines were limited to the first quarter: Employment increased by 11,800, or 3.2%, from April through December, as the American economy reopened and the printing industry’s recovery from COVID-19 recession began.”

For James Cirigliano, vice president of marketing for Diversified Labeling Solutions, Itasca, Illinois, the issue isn’t with finding office staff. Like many of his industry peers, the shortage is felt inside the plant.

“We have had significant issues finding press operators and helpers, especially on our second shift,” Cirigliano said. “We’ve had much better results finding staff for our carpeted work areas.”

There’s no quick solution here, which brings up the million-dollar question: Are printers out of options? No, said Harrison, but it’s going to take some effort on their part.

“Looking [at] traditional, already-experienced people to fill these jobs is a dead end,” she said. “You might get a few, but you’re not going to get enough in the long-term. So what needs to happen is you need to find people who are very interested in learning and then teach them.”

Harrison believes more printers should make second-chance hiring (the practice of hiring individuals with a criminal record) part of their corporate culture. People with intellectual or developmental disabilities are another loyal, hardworking demographic worth investing in. These disabilities are defined by the National Institutes of Health as “disorders that are usually present at birth, and that uniquely affect the trajectory of the individual’s physical, intellectual, and/or emotional development. Many of these conditions affect multiple body parts or systems.” They can include autism, Down syndrome and Fragile X syndrome, among others.

Harrison urged print and promo professionals to seek out nonprofits and government groups that work with these communities. “Creating connections with these groups will be a good way to create relationships that could lead to employment,” she said.

Of course, there’s one obvious group to look at: women. According to a report by ResumeBuilder.com, female employees were disproportionately pushed out of the workforce during the pandemic, and 35% of women who lost their jobs remain unemployed. “I can tell you anecdotally that the number of women who are interested in entering the workforce is huge, but they don’t know how to do it,” Harrison said.

The balance of expectations has changed, and now workers can ask for different baseline aspects of compensation and benefits. The best way an employer can become an attractive brand is to make life easier for the worker, Harrison explained. Offer job prospects higher wages, more flexibility and the ability to schedule their time around personal obligations.

Harrison acknowledged that shift work makes this tough. She suggested scheduling in four-hour shifts instead of eight-hour shifts. Or, check in with employees to see what they prefer. “Maybe they would prefer to work four 10-hour days and have Fridays, Saturdays and Sundays off with their families,” she said. “If there is overtime, that overtime happens on Fridays so that they’re not working 12-hour shifts during the week or working on Saturdays.

“More careful scheduling helps with the ability to change your shift schedule, and that means you have to be careful with what you promise to the customer, because if your salespeople promise something, then the production people are scurrying to try and fulfill that promise,” she went on. “That creates some really ill will between the production staff and the business side of the company, so I think it’s a collaborative environment where sales understands production, and production management understands the needs of their workers, and communication about that is important.”

First, some positives. Dan Taylor, president and owner of BamBams, a promo supplier based in Manassas, Virginia, said that air shipping times, at four to five days from China, are still longer than the pre-COVID average of two to three days. But this has not worsened since 2020, he said, making air freight more or less reliable, if still slower than usual.

On the water, shipping industry leaders, including Maersk CEO Soren Skou, believe that ocean freight backlogs could begin clearing up later in 2022. Hellenic Shipping News reported that, in mid-February, the number of ships waiting to unload at the ports of Los Angeles and Long Beach was down to 78 from a peak of 109 in January, though it was unclear whether this was the start of a sustained trend or a temporary post-holiday lull.

There are also various legislative efforts underway aimed at stabilizing supply chains, including the Ocean Shipping Reform Act, which would give the Federal Maritime Commission greater authority to regulate ocean carriers, and the DRIVE-Safe Act, which would potentially ease trucker shortages by making drivers under the age of 21 eligible for commercial driver’s licenses. Both of these bills have bipartisan support, but both are still in the early stages of the legislative process and, if passed, will likely have only trickle-down impacts on the industry supply chain.

That’s about where the positives end. At press time, China was again locking down major cities as it faced its largest COVID outbreaks of the pandemic. One of those cities, Shenzhen, is a major shipping hub, and logistics companies there warned that the lockdowns would impact port activity. Either way, lead times for standard ocean shipping remain “very long,” according to Taylor, with faster options available only at premium prices.

“Otherwise, standard ocean freight has proved to continue to be unpredictable, taking up to 80 days for freight to become available at a U.S. port after departing China port,” he said. “Our average was a 21-day turn to shipping warehouse after departing China pre-COVID.”

And that’s before recent developments that will almost certainly make things worse. Russia’s invasion of Ukraine has thrown European shipping into disarray, forcing carriers to reroute ships to other ports and disrupting rail and air shipping between Asia and Europe. Both could have ripple effects on global container shipping times, but the bigger and more immediate impacts will come from rising fuel costs as a result of the conflict.

According to FreightWaves, the price of ship fuel was already at or near a record high prior to the invasion. Since then, prices have risen to an average of $987 per ton at the world’s top 20 fuel ports — an 84% year-over-year increase and almost $300 per ton higher than the previous average daily high of $693 per ton, set in January 2020. Add these higher fuel costs to coming increases in yearlong freight contracts — from an average of $5,500 in 2021 to an expected $8,000 this year — and it’s all but guaranteed that ocean freight costs will continue to rise.

Glenn Koepke, general manager of network collaboration at supply chain consulting firm FourKites, told the New York Times that ocean freight rates could reach $30,000 per 40 ft. container — double or triple the current high. “We are going to see rates skyrocket for ocean and air,” he said.

Continued increases in shipping prices, of course, will lead to additional increases in product prices for the print and promo industry. Of the seven suppliers interviewed for this feature, six said pricing was still getting worse, while the other said it was holding steady. And all but one rated pricing at 4 or lower on a 1-10 scale, with 1 representing “most concern.” (See more in the infographic above.)

Cirigliano said Diversified Labeling Solutions raised prices once already in 2022, and expects “two or three” more price increases as the year goes on. Jeff Hall, CEO of iClick, a promo supplier based in Seattle, noted that 2021 was the first time his company increased prices mid-year, but likewise expects an additional mid-year increase in 2022.

“We continue to see costs on many products increase almost every time we submit a new order, and [we] anticipate product costs will continue to escalate throughout 2022,” Hall said. “Although we are doing everything we can to hold pricing, there is a good chance we will have to increase them sometime during the year.”

First: Product availability on the promo side seems to be improving, if slowly. Of the four promo suppliers on our panel, two said product availability was getting better, while two said it was staying the same. But all four scored it a 5 or higher, with one scoring it a 7 and another scoring it a 9.

This varies by supplier and product category, and distributors are still reporting plenty of issues tracking down and securing stock for orders. But suppliers have now had time to adjust to returning demand and build up inventory to match, at least in core product offerings.

“Suppliers are focusing on their products that have easier turnaround and availability to make their offerings more dependable for distributors,” said Eldy Miller, national sales manager for StoneyCreek, a promo supplier based in Blairstown, Iowa. “Hopefully, as the supply chain issues continue to work itself out, product availability will continue to improve. However, this process will be slower than everyone wants it to be.”

Here’s where it gets ugly, and why we’ve devoted a dedicated section to product availability: no one has paper. This, obviously, is a major issue for the print side of the industry, if not the single biggest issue. In stark contrast to the four promo suppliers on our panel, the three print suppliers gave product availability an average score of 2, with all three specifically noting the paper shortage. Two of the three said product availability was getting worse. The other, who said it was staying the same, gave it a score of 1. “It is a complete cluster [expletive],” that supplier said.

That might be an understatement. In the Alliance’s “State of the Industry Update, 1st Quarter 2022” report referenced earlier, 92.4% of respondents said materials shortages would be the biggest challenge their companies face this year. One paper mill in Maine has set up a collection box asking for donations of cardboard it can use to make recycled pulp. Abrdn, a global asset manager based in Scotland, reportedly had to delay a $1.7 billion shareholder vote because it was unable to secure the paper documents required.

The reasons for the shortage are fairly easy to understand, if complicated in scope. Paper mills have been subject to the same labor challenges, raw materials shortages and shipping delays as most industries. A surge in demand for boxes and packaging, due to the explosion of online shopping, has made pulp particularly hard to come by. Some paper mills that once produced a variety of products have turned to manufacturing boxes and packaging to cash in on that demand, making other finished paper products harder to come by.

Print suppliers are also facing allocations on most raw materials. And recent events are impacting pulp and paper supply even further. UPM Finland, a bio refining company that produces 3.7 million tons of paper pulp each year, is in the midst of a worker strike that has shut down production for all of 2022 (thus far) and could extend deeper into the year.

“All raw material suppliers are saying status quo will remain well into 2022,” said Cirigliano. “Also, the UPM Finland strike is just starting to ripple through the U.S. market. It takes nine weeks for the containers to arrive, and with the strike starting at the end of December, shortages are just starting for liner and semi-gloss stock. This will keep lead times long.”

That outlook isn’t exactly rosy. But if there’s a positive, it’s that incremental improvements in other areas, like staffing and non-paper product availability, could help offset or at least partially mitigate paper supply challenges. As has been the case since the start of the pandemic, the industry companies that adapt, evolve and maintain robust partner networks will be in the best position.

“Those who can be the most nimble, with customer relationships built on trust and transparency, will have an easier path to navigate this year,” said Brittany David, chief revenue officer for SnugZ USA, a promo supplier based in West Jordan, Utah. “The global landscape and political climate will likely have an effect on the challenges above and likely present new ones. Hang in there, because we are all in it together.”