German packaging industry defies the covid crisis

The number of companies in the packaging industry is declining. The number of employees, on the other hand, has increased since 2015. This is based primarily on the development of companies with 100 to 499 employees. Compared to 2019, the sales values achieved for the products of the packaging industry increased for the most part in 2020 and 2021. This development is the result of both increased sales prices and increased demand.

The number of establishments within the packaging industry is slightly decreasing.

In 2021, there were 723 establishments in the packaging industry, which is 46 fewer than in 2015. On average, the number of establishments is decreasing by about one percent per year. The number of companies with 500 or more employees remained constant at five companies from 2015 to 2021. The number of farms with 100 to 499 employees has increased by 11 farms to 157 in the same period. Farms with 100 or fewer employees have become fewer in the period from 2015 to 2021. Establishments with 10 to 19 employees were particularly hard hit by this development. Their number fell by almost 20 percent in the two pandemic years 2020 and 2021, and was only 84 in 2021.

Although the number of establishments in the packaging industry has been decreasing since 2015, the number of establishments with 100 to 499 employees has increased by almost eight per cent in the same period. An impact of the Corona pandemic on the number of establishments can only be seen in smaller establishments with 10 to 19 employees.

The packaging industry is building up staff.

Figure 1 shows the number of employees within different company size classes for the years 2015 to 2021.

Overall, the number of employees in the packaging industry has increased slightly from 48,628 to 49,075 within the period from 2015 to 2021. Two thirds of the employees in the packaging industry work in companies with 100 to 499 employees. Figure 1 shows that the number of employees in this size class (orange graph) has increased significantly since 2015. Between 2015 and 2019, the number of employees increased by approximately 4,000 to 33,264. During the pandemic years 2020 and 2021, this number decreased slightly. However, at 32,246, it was still about 3,000 employees higher than in 2015.

Despite the constant number of five companies with more than 500 employees, the number of employees in this company size category is declining (light green graph). The largest decrease in employees occurred from 2015 to 2016. There, the number of employees fell by 700 to 3,778 employees. Since then, the number has only declined slightly. In 2021, the number of employees in establishments with 500 or more employees was 3,340. The number of employees in establishments with fewer than 100 employees has been steadily declining since 2015. Especially in establishments with 10 to 19 employees (red graph), the number of people employed there has decreased by 18 percent in the period from 2019 to 2021.

The increase in employees in the packaging industry is exclusively due to the increase in employees in establishments with 100 to 499 employees. All other establishment sizes have seen a decrease in employees since 2015. The Corona pandemic has so far only had a slight impact on the development of the number of employees in the packaging industry. The only exceptions are companies with 10 to 19 employees and, to a lesser extent, those with 100 to 499 employees.

In the packaging industry, instead of many smaller companies, more and more large companies are emerging.

The combination of fewer companies and more employees in the industry shows that mergers, acquisitions or internal growth are creating fewer but larger companies. This is also supported by the rising number of establishments and employees in establishments with 100 to 499 employees.

In addition to the development of companies and employees, the development of sales in the packaging industry is also interesting. How did the packaging industry develop during the pandemic years compared to the German economy? For this purpose, the gross domestic product of Germany as well as the value of the production destined for sales, i.e. the sales value achieved by the printers for their products without taxes, were considered.

The German economy has recovered about 60 per cent from the economic consequences of the Corona pandemic.

In 2021, the German gross domestic product increased by approximately 3.0 per cent to 3,186 billion euros compared to 2020. Compared to 2019, however, GDP is still approximately 60 billion euros lower. Measured in terms of GDP, the German economy has recovered by approximately 60 percent from the effects of the Corona pandemic.

Figure 2 shows the sales values of the packaging industry from 2015 to 2021 for the segments labels, folding cartons, displays and boxes and cartons made of corrugated paper or corrugated board.

The sales values achieved by the packaging industry increased significantly during the Corona pandemic in 2020 and 2021.

Looking at the development of the achieved sales values of the packaging industry segments, it is noticeable that only in the “Displays” segment (light blue graph) the achieved sales values were steadily declining, but this trend was already evident before the start of the Corona pandemic in 2020.

The achieved sales values in the segment boxes and cartons made of corrugated paper or corrugated board (orange graph) decreased by 200 million euros to 5.5 billion euros at the beginning of the Corona pandemic in 2020. In 2021, however, this value increased by approximately 936 million euros to 6.4 billion euros. However, this strong increase of 17 per cent cannot only be explained by increased demand, but also by increased sales prices. The price index for boxes and cartons made of corrugated paper or corrugated board in 2021 was 117.2, almost 11 percentage points higher than the price index of 2020. The increased sales prices are responsible for almost two-thirds of the increase in the sales value achieved. The remaining third can be explained by increased sales.

With labels (blue graph) and folding cartons (green graph), there are two market segments in the packaging industry whose achieved sales values have already increased in 2020. In the case of labels, even by almost 15 percent to 1.6 billion euros. In 2021, however, the sales values achieved by both segments fell marginally. Even when the price index is taken into account, the same trend remains discernible, as the price indices in both segments have not increased seriously.

Measured by the sales values achieved, the packaging industry has come through the crisis better than the German economy in general. The sales values achieved in the individual segments are, with the exception of the displays segment, in part significantly above the sales values before Corona. This development is not exclusively based on rising sales prices, which occurred due to the following of the Corona pandemic, but also due to increasing sales volumes.

Three positive trends are clearly visible in the packaging industry. On the one hand, the number of employees in the packaging industry has increased since 2015. In addition, demand has increased despite higher sales prices due to increased manufacturing costs. In addition, there is a trend towards fewer but larger companies, primarily with 100 to 499 employees.