Truth in Numbers?

‘As Wall Street Goes, So Goes Main Street’

There’s perhaps no greater visible measure of the health of the American economy than the stock market. When stock prices soar, things are good and brighter days await businesses everywhere. Or so the thinking goes…

But what about the promo industry? How much is it influenced by the stock market and consumer behavior? We tested that idea by comparing the Counselor Confidence Index, which has tracked industry sentiment since 2001, against two widely followed gauges of the U.S. economy: the S&P 500 (a stock market index of the largest publicly traded companies in the U.S.) and the University of Michigan Consumer Sentiment Index. (To make the trends directly comparable, the Counselor and Michigan data were indexed to a common baseline of 100 in 2001.) Here’s what we discovered:

1. Industry confidence aligns more closely to Main Street.
Throughout much of this century, the Counselor Confidence Index has risen and fallen alongside the Michigan consumer index. Both plunged during the Great Recession, rebounded sharply afterward and tumbled again in 2020. In total, the two indexes have moved in the same direction nearly three-quarters of the time since 2001. This tracks with long-held notions that promo end-buyers become cautious and tighten their marketing budgets when consumers feel anxious about the economy and pull back on spending.

2. Wall Street’s impact is far less direct.
Promo’s relationship with the stock market is far less consistent. During the S&P’s exceptional run from 2013 to 2018, the Counselor index remained relatively flat. In other years, the S&P rose sharply while industry confidence declined (2019), or industry sentiment improved while the market dropped (2022). Overall, the stock market and the Counselor index have moved in the same direction just over half the time. The takeaway is clear: Promotional products companies appear to respond more to real-world business conditions than Wall Street performance.

3. This decade has upended expectations.
For nearly two decades, the Counselor and Michigan indexes generally moved together, but the relationship has proven far less predictable since the pandemic. As businesses reopened, industry confidence rebounded sharply even as consumer sentiment weakened amid persistent inflation and economic uncertainty. Then in 2023 and 2024, the relationship flipped. The divergence suggests that promo executives have been increasingly influenced by industry-specific pressures – including supply chain disruptions and labor shortages – rather than consumer sentiment alone, although 2025 represented a sharp decline for both metrics.

4. Confidence falls fastest during periods of uncertainty.
Not surprisingly, the industry’s lowest confidence readings coincide with the biggest economic shocks of the past quarter century – namely the Great Recession and the COVID-19 pandemic, when the Counselor Confidence Index fell below 80 both times. (The baseline reading for the index is 100.) In 2025 and Q1 of 2026, the Counselor index measured 87, which is the lowest reading in the index’s history outside of those two seismic events. It underscores just how disruptive tariffs and other factors were on industry confidence, and how much uncertainty it created.

Verdict: Not Quite True

‘Not All Growth Is Created Equal’

In 2019, the promo industry was riding high, having recorded 10 consecutive years of growth and reaching a new peak of $25.7 billion in sales. That streak ended in 2020, when the pandemic caused industry sales to decline to $20.7 billion – a drop of nearly 20%.

Promo companies quickly got to work making up the loss. By 2022, the industry had matched its 2019 sales total. A year later, North American distributors set a new record, and in 2025, they grew sales year over year by a solid 4.2% to reach $27.7 billion. The setback appeared short-lived.

Or was it? Since 2019, consumer prices in the United States have risen 26% – one of the steepest stretches of inflation in more than 40 years. If industry sales had simply kept pace with inflation during that time, distributors would have recorded $32.5 billion in sales in 2025 – nearly $5 billion more than they actually sold.

The implication is significant. While the industry’s revenue has surpassed its pre-pandemic peak in nominal dollars, its real economic footprint has yet to fully recover. Adjusted for inflation, the promo industry remains roughly 15% to 20% smaller than it was in 2019. In other words, much of the revenue growth over the past six years has come from higher prices rather than an increase in the overall volume of business.

On paper, the industry appears larger than ever. In real terms, however, nearly $5 billion in annual business activity has yet to return.

Verdict: True

‘Follow the Money’

Bankers know a simple truth: Revenue is important, but cash flow keeps businesses alive. That’s why they pay such close attention to accounts receivable – the money customers still owe. When customers delay their payments, it can be an early sign that businesses are under financial strain.

Promo companies have a similar metric: days sales outstanding, or the average number of days it takes to collect payment after an order is fulfilled. For suppliers in particular, it’s a revealing promo and economic indicator. Over the past two decades, the increased speed of commerce and the rise of on-demand ordering has shortened the time between order and payment, resulting in suppliers getting paid up to 15 days faster than they might have in, say, 2010.

But there’s something else at play. The time it took for suppliers to get paid steadily declined throughout much of the 2010s before spiking in 2020 as COVID hammered both the economy and the promo industry. That pattern repeated in 2025, as it took suppliers on average an additional five days to get paid, owing to tariffs and a more cautious business environment.

Bottom line: When economic conditions tighten, cash becomes more valuable. End-buyers often take longer to pay their bills, distributors feel the squeeze and suppliers wait longer to get paid. It’s a telling measure of both current business conditions and where the economy may be headed. “Follow the money” indeed.

Verdict: True

‘Marketing Budgets Are the First To Be Cut’

Businesses constantly have to make choices with their budgets. Buy that new piece of equipment, or launch a marketing campaign? Invest in a new CRM, or take the sales reps on a well-deserved trip?

Ultimately, every decision comes down to one question: What’s the best investment for growing business? During boom times, companies can afford to spend aggressively. When uncertainty creeps in, however, promo companies know all too well that budgets come under scrutiny – especially marketing dollars.

It led us to wonder: How are American businesses investing during good times and bad? And is the promo industry keeping pace? To find out, we compared annual industry sales with U.S. private nonresidential fixed investment – a closely watched measure of how much businesses spend on buildings, equipment, software and other long-term assets. Both series were indexed to 100 in 2000 to compare their growth over the past 25 years.

For much of the early 2000s, the two moved remarkably in step. As businesses invested more in their operations, promo sales climbed alongside them. Since then, starting in 2011, business investment has significantly outpaced promo sales. In fact, over that period, business investment increased 105 index points, compared with 58 points for the promo industry. And the gap has only widened during the 2020s. It doesn’t necessarily mean businesses are relying less on decorated merch. Rather, it suggests companies are directing a growing share of their budgets toward other investments, including the digital technologies and software needed to compete in today’s marketplace.

As for the notion that marketing budgets always get cut first? While promo sales declined both in 2009 and 2020, overall business investment increased in both of those years. Declines in investment for economic downturns didn’t come until the year after.

Verdict: Mostly True