The Trends Industry Outlook and Market Data Report is an annual forecast that provides in-depth benchmarking and analysis of the folding carton industry, new insights, and understanding of key market drivers.
After four years of decline, 2012 saw the first positive growth in the folding carton industry—a 1.2% increase in tons shipped. While moderate growth is expected to continue through 2015, 2012 shipments still fell approximately 537,000 tons short of the total reached in 2007. Slow growth in tons of cartons shipped is expected to continue, averaging 0.8% per year between 2013 and 2017.
Cumulative folding carton shipments remained 9.2% below the 2007 peak. Historically, carton demand has lagged approximately 2% behind overall growth in consumer spending on nondurable goods, a pattern that was fairly consistent throughout the macroeconomic cycles of the last decade. In 2008-09, folding carton shipments plummeted 6.6%, which was in line with the 3.0% decline in consumer spending on nondurables. However, in 2010-11, carton demand continued to decline 4.1% while nondurable spending increased 4.6%. The Great Recession’s impact on the industry will be felt for years to come.
The U.S. economy continues its gradual return to growth, and consumer spending has increased at the fastest rate in more than two years. Consumer deleveraging, assisted by low interest rates, has reduced the household debt service ratio to its lowest point since 1980. Perhaps just as important as slow but marked increasing employment, household wealth has returned to the level just prior to the Great Recession, on the backs of a rebound in home prices and a seemingly unstoppable stock market.
Housing has finally started to rebound and is now one of the key drivers of the U.S. economy. For the first time since 2005, housing added to overall GDP growth and should continue to do so for the near to medium term. Housing starts have rebounded dramatically and prices have risen almost 10%, compared to the same time last year. With interest rates remaining low, affordability of homes remains near all-time highs. U.S. real GDP is expected to grow by 2.2% in 2013 and 3.3% in 2014.
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The leading provider of paperboard packaging industry market forecasts and analysis, RISI is a principal author of this report.