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 Verfasst am: 23. Aug 2023 05:06 Titel: US in 'cardboard box recession |
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US in 'cardboard box recession
In a typical global recession, all sectors of the economy, such as manufacturing, services, retail, construction and trade, tend to decline at the same time, but according to a 5 June report by Jeffrey Kleintop, managing director and chief global investment strategist at Charles Schwab & Co, only manufacturing and trade appear to be in a global recession.Get more news about Boxes Cardboard,you can vist our website!
Kleintop analysed indicators such as industrial production, global trade volumes, job growth by industry, surveys of purchasing managers at manufacturing companies and others, and refers to the phenomenon as a "cardboard box recession".
The Fibre Box Association's data suggests that demand for corrugated containerboard has fallen at a similar rate to previous recessions, and is consistent with the findings of other analysts who say that while North American containerboard producers predicted an upturn in box demand in the first quarter of this year, demand may not begin to trend upward until the end of 2023.
The Washington-based American Forest & Paper Association's first-quarter boxboard report also reflects the low demand trend seen this year. According to the AF&PA, total boxboard production in the first quarter was down 5 per cent compared to the first quarter of 2022, while the boxboard operating rate was 87.8 per cent, down 6.1 per cent from last year.
Kleintop says the evidence of the boxboard recession suggests that the mild recession in corporate earnings could continue. He points to the double-digit margin gap between earnings expectations for carton and service industries. He says the earnings growth forecast for manufacturing companies is +3.8 per cent, compared with +14.9 per cent for services.
"The wide gap ... highlights the extent to which economists and analysts agree on the nature of the current economic environment," writes Kleintop, adding that double-digit returns in global equity markets in the first half of the year may reflect expectations of an end to the box recession.
But as paper and packaging companies report first-quarter earnings, the results are also consistent with Kleintop's and other analysts' findings of continued weak box demand.
Atlanta-based WestRock Co. and Memphis, Tennessee-based International Paper (IP) both reported economic downturns in the first quarter. WestRock reported a net loss of $2 billion, which included 265,000 tonnes of economic downtime, and IP reported 421,000 tonnes of economic downtime - the third consecutive quarter the company has taken what it calls significant economic downtime. |
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