A rise in imports will weaken demand, with firms shifting to high-value products to survive.
Los Angeles, CA (PRWEB) October 12, 2013
The United States is no longer the world's largest producer of paper, having been overtaken by China in 2008. IBISWorld estimates that revenue for the Paper Mills industry has declined at an average annual rate of 2.7% to $49.4 billion in the five years to 2013. Domestic revenue contracted sharply as the recession pulsed through key buying sectors in business and advertising. “The industry has been unable to recover from the recession, as the increased usage of online communication has cut demand for paper products,” according to IBISWorld Industry Analyst Jesse Chiang. In 2013, revenue is expected to continue declining, falling 0.1% during the year due to continued weakness in the industry's downstream markets.
Industry margins are still historically low, remaining below prerecession levels. Over the five years to 2013, wood pulp prices grew at an average annual rate of 1.9%, while industry product prices increased only 0.8% per year on average, forcing operators to absorb the difference. Furthermore, poor economic conditions forced industry operators to exit the market or consolidate with other players. During the period, the number of paper mill operators declined at an average annual rate of 1.9% to 152 remaining companies.
The Paper Mills industry will face continued challenges over the next five years. Downstream demand for paper products will recover in the short term as the economy gains steam, but demand is expected to remain below prerecession levels. “In the long term, demand is expected to continue falling as consumers increasingly substitute the industry's paper products for electronic recordkeeping systems,” says Chiang. Furthermore, as the dollar strengthens, competition from imports will increasingly squeeze domestic profit margins, encouraging industry operators to concentrate on high value-added papers.
For more information, visit IBISWorld’s Paper Mills in the US industry report page.
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IBISWorld industry Report Key Topics
The Paper Mills industry manufactures paper in paper mills from pulp; mill operators may manufacture their own pulp or purchase it. Industry products include paper rolls and reams, including printing and writing paper, newsprint, and packaging and household papers. These products are sold to individual and business consumers, as well as downstream manufacturers in product areas such as coated or treated paper, stationery, paper bags, newspaper or magazine publications and other printing services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772