News Analysis: Packagers Need  More Than a Compass Now

Who really knows where the packaging industry—or the entire economy, for that matter—is headed these days? Usually, an established industry tradeshow gives you a pretty good indication of the industry's direction. However, that wasn't necessarily the case when I visited the recent WestPack show in California.

For a good part of the show, it appeared to be business as usual. The aisles were crowded. People were looking at new machinery running on the floor and asking questions. The guy in the booth next to us had a huge grin because he had just completed a million dollar sale. But when I started talking with packagers on the floor, it was apparent that many of the companies have put investments on hold. These packagers say there are many contributing factors, such as reduced orders, tight credit and uncertainty over potential tax credits in the government's bail-out plans. Many of these companies have expansion plans ready to go; they're just waiting on funding. It's a well-known axiom that there is always money to be made—even in down markets. Even severe downturns like the one we now face are largely psychological crises of confidence. A recent article pointed out that there are two types of businesspeople: Those who panic and cut the vitality out of their business through layoffs and physical downgrades; and those who try to understand where these sweeping changes are taking us and invest for the future. Which type are you?

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