As disposable income recovers, consumers will buy higher-quality, pricier paper products.
New York, NY (PRWEB) May 23, 2014
The Sanitary Paper Product Manufacturing industry outperformed much of the manufacturing sector throughout the recession, but experienced a considerable slowdown during recovery. Operators in this industry produce a number of everyday paper goods, including toilet paper, paper towels, facial tissues, diapers, menstrual pads and tampons. From 2009 to 2014, industry revenue is expected to remain relatively unchanged, with near-stagnant annualized growth over the five years.
Lower per capita disposable income throughout 2010 caused private and commercial consumers to buy generic products (often lower in price), reducing industry revenue and profit margins. Since 2011, however, revenue has increased, recovering from its recessionary declines. In 2013, industry revenue rose, boosted by greater demand both domestically and in emerging markets overseas, where the number of middle-class consumers is increasing. With slight declines expected in exporting revenue, industry revenue is slated to decline marginally in 2014.
While exports outpaced import growth during the past five years, the United States is still a net importer of sanitary paper products. Currently, according to IBISWorld Industry Analyst Edward Rivera, “a large proportion of all sanitary paper products are imported, compared with a lower percentage five years ago.” China in particular has contributed to growing imports of sanitary paper products by offering low-priced products that were popular during the recession. In light of stagnant demand in the US market, “domestic manufacturers have increasingly targeted emerging markets and their growing middle class, a factor that has boosted export growth during the period,” says Rivera.
The Sanitary Paper Product Manufacturing industry has a high level of market share concentration. The changing demographic makeup of the United States is expected to help boost revenue over the next five years. With an aging population, the demand for adult diapers and other incontinence products will rise. In addition, improving per capita income will ultimately lead to an increase in the number of births, lifting demand for diapers, wipes and other sanitary products. Both these factors will drive demand for industry products and boost industry revenue. Furthermore, the world price of wood pulp is expected to stabilize in the coming years, which will allow firms to better anticipate their expenses and enact cost-cutting measures, widening profit margins. Through the five years to 2019, IBISWorld expects the industry to grow at an average annual rate.
For more information, visit IBISWorld’s Sanitary Paper Product Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the Sanitary Paper Product Manufacturing industry convert sanitary paper stock or wadding into sanitary paper products. These products include table napkins and tablecloths, toilet paper, paper towels, facial tissues, disposable diapers, sanitary napkins and tampons. Some companies produce their own sanitary paper, while others purchase paper from paper mills. Final products are sold to either wholesalers for distribution or directly to buyers.
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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