Packagers forecast packaging will grow by nearly a third over the next two years, much more than the 1% growth predicted by intermediaries.
91% of packagers believe that by 2009 they will be packaging more business than at present, with 56% expecting growth in excess of 25%, and 30% expecting growth of between 11% and 25%. Only small minorities expect volumes to remain the same (6%) or decline (4%). Average growth expected by packagers is 32%.
On the other hand, 67% of intermediaries expect packaging volumes to remain stable, with 23% expecting growth and 10% predicting a decline.
Godfrey Blight, director of IMLA, commented: “Packagers and intermediaries agree that packaging is set to grow, but disagree quite strongly over how much. Packagers are optimistic about their future business prospects and are much more bullish than intermediaries. However, one thing is clear – nobody expects packaging to go away, as has been predicted in some quarters.”
In terms of future trends, nearly half of packagers (48%) expect lenders to try to acquire packager firms, and 22% do not. The remainder were undecided.
Packagers view the technological enhancements from lenders (such as on-line decisions in principle, offers, etc) in a broadly positive way. 57% of them think such enhancements are a benefit, compared with only 28% who see them as a threat to their business.
Interestingly, in the intermediary survey more than half of respondents (53%) thought that technological developments on the part of lenders would cause brokers to place more business direct, although a significant but smaller proportion (44%) indicated that it would make no difference.
Blight commented: “Packagers broadly welcome these technological enhancements, but there is evidence that it could have a negative impact on the amount of business intermediaries will channel through them. Again, there is a clear mismatch, with packagers more optimistic about the future for their business than intermediaries are.”
“However, everyone agrees that technology is the key issue for the whole industry. 70% of packagers said that making their service more technology based was the most important future development in the industry – that was mentioned ten times more often than any other issue.”
