Economic upturn to boost US carton demand

The Corrugated & Paperboard Boxes report stated that gains will be driven by a rebound in manufacturing output and continued expansion of the overall economy. 

Further, the trend of ‘reshoring’ or ‘onshoring’ of some manufacturing activity is expected to counter the outsourcing of production to low labor cost regions, which has restricted growth for the box industry in recent decades.

Folding carton demand is projected to increase 1.4 percent per year to 9.9 billion USD in 2018, an improvement from the 2008-2013 performance but held back by competition from other packaging formats, such as flexible packaging. Prospects will benefit from the rebound in non-durable goods output, expanded opportunities in carry-out food applications and paper-based packaging’s appeal as part of sustainability efforts, according to the report. 

Set-up box demand will also see relatively slow increases based on competition from less costly alternatives such as folding cartons and plastic containers. Ongoing demand will be helped by an improved outlook for discretionary spending and set-up boxes’ entrenched position as upscale packaging for premium confectionery products and fragrances. 

Corrugated and solid fiber box demand will expand more rapidly than that for folding cartons and set-up boxes, advancing 3.1 percent annually to 29 billion USD in 2018. This growth will be fueled by the recovery in the manufacturing sector, especially in the output of food and beverages, pharmaceuticals and other non-durables. Other factors include an improved outlook for consumer spending, a rebound in construction activity, and continued rapid growth for online shopping. 

Overall, box production volume will rebound from declines of the past decade but will be moderated by the increased presence of lighter weight containerboard and pressures to reduce excess packaging. 

Freedonia Group analyst Esther Palevsky said: ‘Growth will also benefit from heightened demand for value-added box types such as those that feature high quality graphics and printing or are constructed in display-ready form.’