The promotional products industry is worried that President Obama’s executive order to cut back on federal agency “swag” could lead to job losses.

Obama this week ordered agencies to find ways to cut about $4 billion per year from the federal government’s budget for travel, cellphones, conferences and “swag” like agency-branded mugs and clothing.

{mosads}“We certainly wouldn’t want people to stop using promotional products, if they can be used efficiently and effectively, in a knee-jerk way and cost jobs,” said Tim Andrews of the Advertising Specialty Institute, which represents the promotional products industry.

“For the president to say that buying promotional products is a waste is extremely troubling and shows how little he knows about the industry,” Matt Bertram, president of Fields Manufacturing, said in a statement. “This is again another example of our administration making quick decisions that will hurt small business.”

Andrews said the $17 billion industry employs up to 500,000 workers in the United States, and that the government is a major customer. Andrews said the Census saved $85 million in 2010 by using promotional items to remind people to return forms.

ASI does not have an estimate for how much the federal government spends on promotional items, though the group predicts the federal elections process in 2012 will reap $350 million in sales.

So far the group has not identified a congressional office to spearhead a fight against the swag order but has been discussing a lobbying response.

“There has been a discussion internally and we have reached out to some congressional leaders,” Andrews said.