MFSA: Growth for Mailing Industry in Q1

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The mailing and fulfillment sectors of the mailing industry both show growth in sales and volume of items shipped or mailed compared with the same quarter a year ago, according to the Mailing & Fulfillment Service Association's Industry Business Outlook for first-quarter 2003, released this month.


The study, however, said that profitability appears to be stagnating, suggesting that competition for business is intense and some are making sacrifices to their bottom line to maintain their business.


On the mailing side, a majority of members reported that gross sales and mailing volume are up from the same quarter a year ago. But the same number of respondents reported an increase in profitability as those reporting a decrease.


What's more, among those reporting a drop in net profit, the average decrease exceeded 85 percent. Those reporting higher profit reported an average rise of 36 percent, MFSA said.


Mailers also said they are mildly optimistic about second-quarter 2003. Slightly more than half expect their sales to rise compared with the first quarter, but fewer expect increases in mail piece volume or profitability.


The data for fulfillment operations suggest that competition is having a similar effect on bottom lines.


More companies in the first quarter reported increases in gross sales than did those reporting decreases, but the gap is narrow -- 11 percent. Nearly as many companies reported no change in sales compared with a year ago as did those reporting a decrease in sales. Only four in 10 fulfillment operations are seeing sales growth.


Only about 40 percent of fulfillment operations reported increased profit while the balance saw no change or a decrease.


Prospects for the second quarter are split, with about half of those who participated in the survey seeing their sales, profit and shipping volume increasing, and about half anticipating no change or a decrease.


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