Declining demand for industry services will put major pressure on industry operators
New York, NY (PRWEB) July 04, 2014
The Paper Mills industry has experienced little improvement in the past five years due to growing competition from foreign paper manufacturers and lingering levels of low demand for paper products. The United States is no longer the world's largest producer of paper, having been overtaken by Chinese manufacturers in 2009. IBISWorld estimates that revenue for the Paper Mills industry has slowly increased at an average annual rate of 0.6% to $48.4 billion in the five years to 2014. Revenue has experienced mild improvement over the past five years, although the effects of the recession continue to limit spending among downstream industries. Industry operators have emerged from the recession with concerns surrounding the increasing popularity of online communication, which will continue to reduce demand for paper products going forward. In 2014, Paper Mills industry revenue is expected to increase 2.7% in anticipation of slightly higher wholesale paper prices and increasing corporate profit.
Industry profit has fallen from 6.0% of revenue in 2009 to 5.4% in 2014; however, it has recovered from its recessionary low of 2.9% in 2007, when manufacturing demand from downstream markets came to a sudden halt amid the climate of vastly reduced spending on nearly all forms of commercial and industrial paper products. Over the five years to 2014, the price of paper grew at an average annual rate of 6.6%, and corporate profit, a key indicator of downstream demand for industry paper products, recovered at an impressive 9.6% average annual pace over the period. These improvements have helped paper manufacturers weather the recessionary storm over the past five years, without any major declines in total revenue. According to IBISWorld Industry Analyst Nick Petrillo, “The industry has emerged from the period significantly leaner due to bankruptcies, restructuring efforts and mergers.” The number of paper mill enterprises has fallen at an average rate of 3.1% over the five-year period, from 172 to 147.
“The Paper Mills industry will face continued challenges over the next five years,” says Petrillo. Downstream demand for paper products will recover from recessionary lows, but the increasing presence of digital office communication platforms will pose a major threat to industry revenue going forward.
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, a fibrous material derived from wood. Mill operators may manufacture their own pulp or purchase it. Industry products include paper rolls and reams, including printing and writing paper, newsprint, packaging material and household papers. These products are wholesaled to individual consumers, businesses and downstream manufacturers who may further convert paper products into specialty paper products.
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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.