Turns out that cardboard box you just body-slammed into a recycling bin also happens to be an interesting gauge of economic conditions.
During the pandemic, a pivot in consumer demand from services to goods helped push box prices some 55%.
Industry leaders adjusted production capacity to meet demand. Now, though, like boxes, the economy is lying flat, and less material appears to be needed.
According to reporting from FreightWaves:
- In Q4, US box shipments dropped 8.4%, the worst dip since the Great Recession, and ~20% of US box production capacity was untouched, the most since Q1 2009.
- At 4.3 weeks, supply of the packaging material containerboard was unusually high last quarter, and boxboard saw its lowest operating capacity on record, per the American Forest & Paper Association.
In a recent call to investors, the Packaging Corporation of America said inflation, rising interest rates, a shift from goods back to services, and a cooler housing market have all dampened box demand.
Good news is, despite the slump, the Packaging Corporation of America expects shipments for Q1 2023 to be 6% higher than the same period in 2019.
Get the 5-minute roundup you’ll actually read in your inbox
Business and tech news in 5 minutes or less