The economic slowdown has brought increasing uncertainty to the selling environment for industrial wipes. There are healthy categories that have sustained price increases, but with overall demand mixed at best, price tags aren't likely to climb any further this year. Supply is sufficient as producers have addressed most spot shortages in the past twelve months with new capacity.

"Industrial wipes track industrial production, which is slowing down," says Keith Beddingfield, global business manager for Industrial and Specialty Absorbents at Dupont, Nashville, Tenn. Still, he says that Dupont, which provides both finished wipes and nonwoven fabric, has seen more activity at the high end of the segment serving industries such as aerospace, pharmaceutical, printing, and auto.

Slowing demand has been affecting the industrial wipes market for several months. Jeff Slosman, CEO, National Wiper Alliance, Asheville, N.C., says demand has been stationary "or a little soft" since fourth quarter 2000. He attributes the industrywide downturn to the current economy and to the loss of domestic manufacturing facilities.

Though demand has dropped, suppliers say the outlook for industrial wipes is not bleak. Randy Kates, director of wiping products at Kimberly-Clark, Roswell, Ga., says, "The overall wiping market is increasing 2%-3% with the economy. Declines in some manufacturing sectors are being offset by increases in specialty markets, such as foodservice and clean environments." Tim McMillen, wiper program manager at New Pig, a distributor and recent entrant in the converting segment of the wiper industry, Tipton, Pa., says there was a brief downturn early in the second quarter, but orders are rising again.

Though the economy has softened, one industry source confirms that a 4% price increase for national industrial wipe brands has stuck this year. Suppliers attribute the price rise to steep increases in their energy costs.

One supplier says mills and converters raised tags for industrial wipes an average of 6% in first quarter 2001, but are not likely to boost prices again due to spotty demand. Producers usually increase prices one or two times each year, but industry sources are hesitant to forecast additional hikes due to the decelerating economy.

Beddingfield says Dupont has made "no significant moves" in price over the past year, and avoids adjusting industrial wipes costs in relation to frequently changing spot prices for raw materials such as polyester, wood pulp, and rayon.

Given sluggish growth in demand, industrial wipes will be readily available in coming months. There is no problem sourcing national brands, says New Pig's McMillen. New and reclaimed rags are also abundant, says Slosman. He points out that the strong dollar has caused the market for exports to weaken, and mills in the U.S. have responded by converting inventory to capital, flooding the market with rags.

Based on current conditions for supply, buyers can expect leadtimes to remain short, and possibly shrink further. Slosman says leadtimes are between 3-5 days for in-stock items.

Where there have been shortages, leadtimes have extended to 2-3 weeks, but most delivery periods are expected to shrink due to additional capacity. However, Slosman says new white rags remain in tight supply as the number of domestic textile mills has dropped.

Industry consolidation continues. Late in 2000, Georgia-Pacific, based in Atlanta, completed its acquisition of Fort James, known for the Fort Howard and James River brands.

Regulations to watch include the hazardous waste guidelines issued by the Environmental Protection Agency (EPA). The federal government "recognizes the need to provide a consistent national policy for handling shop towels, nonwovens, and rags when they are soiled with solvents," says Ralph Solarski, manufacturing market manager at Kimberly-Clark, Roswell, Ga., and chairman of a regulatory committee at the International Nonwovens and Disposables Association (INDA). Current regulations exempt rental towels from being classified and treated as hazardous materials.