The estimated dollar value of manufacturers' shipments of consumer nondurable goods declined by 0.8% between June and July, following a 1.0% gain during May and no change during June. The combined value of food/beverage products shipped rose 1.2 %, but through the first seven months of 02 were worth only 0.5% more than during the same period a year ago. And the value of pharmaceuticals/medicines shipped plunged 17.2% during July—after rising more than 12% in June. With food prices showing signs of firming, the overall dollar value of consumer nondurables by Q4 02 will be running marginally ahead of the total for Q4 01—about the best we can hope for.

Converting's exclusive packaged goods price index (PGPI) declined 0.2% between June and July, following a 0.5% increase the month before. Our composite index stood just 0.9% higher this July than during July 01. Average prices for 8 of the 16 components that make up the PGPI increased, 6 declined, and two product groups were flat. There were moderate declines in household appliances, alcoholic beverages, cosmetics, and soft drinks—all product categories that carry relatively high weights in the calculation of the PGPI. The overall change in consumer packaged goods prices should remain well below 2% right through 03.

Growth in converting product end-markets slowed markedly during the first half of this year. Still, 02 hasn't been a complete "bust" for converting product manufacturers and distributors, since consumer markets have held up so much better than business-oriented markets during this extended period of recession and sluggish economic recovery. Overall retail sales during Q2 02 were only 2.8% above Q2 01. Grocery store sales over Q2 02 were a scant 0.9% greater than during Q2 01 (vs. a much healthier 3.6% over-the-year gain in the first quarter). But sales at eating/drinking places expanded at a 5.8% annual rate during the spring of this year, and drug-stores sales continued to shine with annualized growth of almost 9%. On balance, therefore, there's reason to believe that growth in converting end-markets will pick up, from what should be considered an already respectable pace, compared to other sectors of the economy, in the months ahead. And gains in converting markets will unquestionably accelerate as we move into 2003.