July 17, 2023
It’s hard to believe we’re already in the second half of 2023. In the last six months we’ve witnessed a slowing economy, high interest rates and a Purchasing Managers Index (PMI) below the 50 percent mark. And this isn’t limited to the US. During the FBA Annual Meeting and ICCA/WCO Global Summit last month, we had an opportunity to interact with packaging association leaders from around the world. The news was very similar – slower economies, difficulty in hiring and retaining employees, and inconsistencies in acquiring raw materials. Most industry leaders felt these conditions would persist through 2023 and into the first half of 2024.
Manufacturing in the US has fallen to 70 percent of normal production according to the Institute of Supply Management (ISM). The PMI has been below 50 percent for six straight months, indicating a recession in the sector. Since corrugated box shipments follow manufacturing output, box shipments experienced a weak first quarter of -8.5 percent growth. It’s important to keep in mind 2023 shipments are being compared to record industry shipments in 2020, 2021 and 1H2022 resulting from pandemic-induced changes in consumer behavior, including increased online purchasing. As a result, current demand should be compared to pre-COVID times. Shipments were off less than 1 percent in the first quarter of 2023 when compared to the same period in 2019 on a per day basis. (Second quarter data will be released on Friday, July 28th at 4:30 pm ET).
To help individual companies benchmark performance against the industry, FBA has published the following reports:
In addition to publishing these reports in 2023, the FBA team planned and executed the FBA Annual Meeting and ICCA/WCO Global Summit held in Alberta, Canada. Bryan Hollenbach, FBA’s new chairman and ICCA chairman, Mike LaFave, led us through three days of excellent presentations and activities. At the meeting, our membership voted to add Joe Palmeri, Jr. (Jamestown Container), Juan Pablo Perez (Smurfit Kappa NA) and Clay Shaw (Batavia Container) to the FBA Board of Directors for the 2023-2026 term. We would like to welcome them to the Board and thank those whose term has ended for their contributions.
Two important webinars were conducted on the Economic Trends and Outlook for Corrugated Products and the Pallet Overhang research project. Both webinars can be found on the FBA website.
If you’ve recently viewed the FBA website, you noticed a new look, streamlined navigation and device responsiveness. We welcome your feedback as we continue to improve the website’s value to members.
We’d also like to welcome Peachtree Packaging & Display, Coastal Container and Merrill Industries, three new FBA member companies in 2023. Our association and industry appreciate your support.
During the second half of 2023, FBA will work with the Corrugated Packaging Alliance (CPA) to communicate the corrugated industry’s latest Life Cycle Assessment (LCA). This report will show improvements made from 2014 – 2020 to reduce the environmental impact of corrugated products including the extraction of raw materials, manufacturing, distribution, and end of life.
We expect state legislative activity affecting packaging to continue throughout the year. As the voice for the corrugated industry, FBA will work closely with the American Forest and Paper Association to communicate any movement on major legislative issues such as Extended Producer Responsibility (EPR) and others that may impact your business.
The Corrugated Industry Promotion Program continues to gain followers on social media and deliver messaging about the benefits of corrugated boxes. In addition, FBA staff will help support the Box to Nature (B2N) campaign by working with members to place a recycling message on the top flap of the corrugated box.
Our industry is facing challenges once again in 2023. This is nothing new for us. We will continue to persevere and be stronger as a result.
Please reach out to us if you have any comments or suggestions.
Bob McIlvaine, President/CEO
and the FBA team