Measured Growth for Folding Cartons Through 2021
By Ben Markens, President, Paperboard Packaging Council
Now that 2018 is here, it’s time to start thinking about 2019…and 2020. As business leaders, we always have to keep an eye to the future. One way we can to do this in the folding carton industry is with the Paperboard Packaging Council’s (PPC) recently released “Trends: Industry Outlook and Market Data Report.” It’s a great resource that highlights economic and consumer forecasts for folding cartons through 2021. Best of all? The industry is growing. The report forecasts that U.S. folding carton shipments will grow at a 0.4% annual rate over the next five years, reaching a value of $9.6 billion.
Prepared for PPC’s members by RISI, a provider of pulp and paper industry intelligence, the Trends Report describes how overall economic trends will affect the folding carton market in the near and far terms. With unemployment at its lowest in years, real wages rising modestly and consumer net worth at the highest level in decades, consumer spending is expected to accelerate above 3% by 2021. The state of the U.S. economy is far from perfect, but conditions for the consumer—those that fuel demand for goods packaged in folding cartons—are clearly on the mend.
This positive business environment is a key factor in Trends’ growth forecast for the next five years. Shipment growth will be healthiest in the middle of the five-year forecast, as the current business cycle is predicted to peak in 2020. The total value of U.S. carton shipments is predicted to grow from an estimated $8.6 billion in 2016 to just over $9.6 billion in 2021, while average annual values per ton will increase 1.9% per year.
Furthermore, a recent break in board prices is welcome news to the industry. From 2011 to 2016, paperboard costs rose at an annual average rate of 2.2%, cutting into converters’ profitability as the average value of folding cartons increased by just 1.3% over the same period. The recent drop in U.S. boxboard prices was likely caused by substantial new boxboard capacity in Europe combined with an oversupply of cartonboard in China.
In addition to forecasts for the overall folding carton market, Trends also analyzes 17 end-use segments including confectionery, dairy, dry foods, cosmetics, pharmaceuticals and recreational products. This year, four categories were classified as growing markets, six as mature and seven as declining.
These are just the top-level trends that all folding carton leaders should know. The full Trends Report, on the other hand, has more than 130 pages of additional insights. PPC members can download it at paperbox.org.
Now in its 89th year, PPC is the North American association for converters of paperboard packaging and their suppliers. PPC works to grow, promote and protect the paperboard packaging industry while providing its members with resources and tools to compete successfully in the marketplace. For more information, visit paperbox.org.