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Dec 13th, 2014 Comments Off on A Positive Outlook For The Packaging Industry By 2018

A Positive Outlook For The Packaging Industry By 2018

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It is forecasted that the paperboard corrugated box demand in the United States will increase by at least 2.6% per year or $39.4 billion in 2018, a great improvement over the recession years. This prediction is driven by the rebound in manufacturing output as well as continued expansion of the economy. The outlook for the US economy looks better with help from the increased production of oil and gas. The level of skills of the workforce is improving and intellectual capital is growing in quality.

The heightened demand for packaging

There will be a heightened demand for value added box types that include high quality graphics and printing or those that have be constructed in a display-ready form. Another trend that will significantly benefit the box packaging industry is on-shoring or re-shoring that will counteract the outsourcing of production to regions that have lower costs of labor. Outsourcing is one the reasons why the growth of the packaging industry has been restricted in recent years. These and other trends are results of new studies made by The Freedonia Group Inc., a Cleveland-based industry market research firm.

It is also expected that the demand for corrugated and solid fiber box will expand faster than folding boxes and set-up boxes, advancing by at least 3.1% annually to about $29 billion in 2018. This will be due to the high recovery rates of the manufacturing sector particularly in industries like food and beverages, pharmaceuticals and non-durables. Increased consumer spending and the growth of online shopping including a rebound in the construction industry are the other factors that will revive the packaging industry from its decline in the past decade. However, growth will be moderated by the existence of lighter weight container board and the environmental pressures to minimize excessive packaging.

The demand for folding carton is also forecasted to increase by 1.4% per year to about $9.9 billion in 2018 but it will be impacted by competition from other packaging formats like flexible packaging. However, demand will be sustained by the non-durables and the opportunities provided by carryout food applications and the appeal of paper-based packaging. Set-up boxes also have an entrenched position as upscale packaging for premium confectionary products and fragrances.

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