Bloomberg notes decline in demand for cardboard boxes in the US
The situation is similar in the Russian packaging market. Experts consider packaging to be a kind of indicator of the state of the economy, and a decline in this area may indicate a slowdown in business activity
Updated at 14:40
Demand for cardboard boxes in the United States has fallen, worrying economic analysts and investors, Bloomberg reports.
The agency writes that demand for packaging is a kind of "non-traditional economic indicator." Boxes are used everywhere in business - they are used to pack both televisions and food products. Therefore, the lower the demand for packaging, the lower the economic activity.
According to the Fiber Box Association, box shipments in the United States have fallen to their lowest level since 2015. American manufacturers reported a 5% drop in shipments compared to last year. Bloomberg believes that the drop in demand is due to the controversial tariff policy of US President Donald Trump.
What is the current demand for packaging in Russia? And is it really possible to judge the state of the economy by this indicator? Chairman of the Expert Council of the National Confederation of Packaging Manufacturers of Russia Yuri Alpeyev discusses:
— Indeed, cardboard boxes are a good indicator of the state of the economy, because the demand for them determines the state of a large conglomerate of industries, especially the food industry, the chemical industry, such a multi-factor index. Therefore, if you look, now the demand for boxes has really decreased. As a result, it turns out that the relevant industries are in a stagnant state. The packaging community complains about underutilization of capacities, and in total this, of course, indicates that there are some problems in the economy, but first of all the problem, of course, is already in the area of demand, primarily in retail chains. And, most likely, today we are seeing elements associated with deflation, which has been reported for the fourth week in a row. This just indicates that demand is decreasing and everyone is forced to reduce prices in order to maintain demand. There is another important factor here. These are marketplaces. The fact is that their decrease is also a factor in demand for boxes, because in fact, marketplaces re-package products during shipment and delivery to the end consumer. This means that the economy is currently stagnating at the very least. Demand from the population is falling, and accordingly, turnover in retail chains is falling, and in total we get the result of the measures that were discussed and aimed at reducing inflation, these measures have led to a decrease in production. The decline actually began around April-May. The high rate has had a serious impact on the economic elements of the work of enterprises.
— How are the packaging companies doing? How much have they suffered from this?
— I can’t say that they suffered much. The big ones — no, but small enterprises, especially in the printing industry, have a problem related to the fact that their workload has dropped by 15 percent. In some, the decrease is greater, which is generally critical for them.
However, some packaging manufacturers, on the contrary, are seeing growth. Especially those who work with the HoReCa sector, that is, with the hotel and restaurant business, says Anton Barbashov, head of the marketing department of cardboard packaging manufacturer OSQ Group. But he emphasizes that this is not about cardboard, but about more specific packaging:
Anton Barbashov, head of marketing department, cardboard packaging manufacturer OSQ Group
As Bloomberg writes, another reason for the drop in box sales may be low demand for housing. People are not moving, therefore, they are not buying refrigerators, televisions, other appliances and furniture for new houses and apartments.
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