Industry revenue growth will slow as imports of already-packaged goods increase.
Los Angeles, CA (PRWEB) December 18, 2013
The Paperboard Mills industry is truly domestic; less than 2.0% of paperboard purchased in the United States originates from overseas. Because paperboard is not cost-effective to transport, the industry has a high degree of protection from foreign imports. Even with the ability to service the majority of downstream manufacturers with their required paperboard, however, the industry was unable to avoid the adverse impacts of the recession on demand. Moreover, volatile input prices over the five years to 2013, particularly the world price of wood pulp, damaged profit margins for operators that could not pass cost increases onto their customers.
According to IBISWorld Industry Analyst Stephen Hoopes, “Paperboard is primarily sold to cardboard packaging industries; therefore, demand for paperboard suffered alongside these industries in recent years.” However, since the recession, demand for cardboard packaging and, thus, paperboard, began to rebound along with burgeoning activity in consumer products manufacturing. As such, over the five years to 2013, revenue is expected to increase an annualized 1.6%. In 2013 alone, along with a relatively sharp increase in paperboard prices, revenue is expected to grow 5.2%, to total $29.7 billion.
There are an estimated 177 establishments in the Paperboard Mills industry. Weakened operating conditions during the recession and a slow recovery period prompted industry companies to restructure and downsize their operations. Over the five years to 2013, the number of establishments is expected to decrease at an annualized rate of 1.3%. Similarly, layoffs were considerable over the five-year period, particularly in 2009, as operators attempted to reduce operating costs and salvage profit margins. Due to these cost-cutting measures and increased labor productivity caused by rising capital expenditure, employment is anticipated to decline at an annualized rate of 1.8% from 2008 to 2013.
Over the five years to 2018, the industry's outlook is slightly less promising. Industry revenue is anticipated to remain highly correlated with the performance of its downstream industries. “Revenue growth will slow for paperboard mill operators as a stronger US dollar encourages an increase in already-packaged imported consumer goods and fewer exports,” says Hoopes. As such, domestic cardboard requirements for packaging will decrease, diminishing demand for paperboard over time.
For more information, visit IBISWorld’s Paperboard Mills in the US industry report page.
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IBISWorld industry Report Key Topics
The Paperboard Mills industry processes pulp, used paper and old corrugated containers (OCC) into various paperboard varieties, including unbleached and bleached packaging paperboard, coated paperboard, industrial converting paperboard and recycled paperboard. The paperboard this industry produces is sold mainly to cardboard box and container manufacturers and to a range of consumer and industrial product producers for further processing.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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