But one production measure of containerboard—the grades used for making corrugated—suggested volatile demand and uncertainty about the strength of the economic recovery, MNI pointed out.
"I would not say that we are seeing a strong upturn in orders," Jana Harris, president of Harris Packaging Corp., a maker of corrugated and folding-carton packaging in Fort Worth, Texas, was quoted in the MNI report. "We are not convinced that the economic recovery is well established. It is improving but not at a rate that would make us feel comfortable enough to say that it has turned around."
By early April, orders year-to-date were 4% greater than a year earlier, while the dollar value of sales was higher because of a recent price increase, Harris added. The company's biggest orders have come from the food and pharmaceutical industries while there has been a loss from manufacturers of durable goods such as technology and furniture, who have moved their operations overseas.
Most of the company's growth has come from acquiring new "brown box" customers and from more opportunities in retail display, rather than from existing customers, Harris noted. Meanwhile, the 100-employee company is losing some existing customers to lower-priced competitors. "Accounts that we have provided quality product and service and built a strong relationship with over many years are now going out for national bids," Harris said.
According to Scoring Boxes, a newsletter for the packaging industry, shipments of corrugated boxes rose an annual 0.7% in February, the latest month for which data are available. Year-to-date, MNI reported, shipments rose 0.4%, a rate that the publication said reflects moderate growth in the non-durable goods sector. "This steady growth rate is consistent with the slow growth in output of the nation's nondurable goods manufacturing operations which have increased output by 1.2% during the first two months of 2013," the report said.
But there are signs of volatility in demand for packaging, according to the report. It said the amount of containerboard that is not consumed by U.S. corrugators, exported, or held in inventories, was 95% higher in February than the seven-year average for that month. That followed volatile output in the "unidentified" containerboard production in January and December, suggesting customers still lack the confidence to place large orders on a sustained basis, the report said.
Mill inventories of containerboard reflect the same erratic pattern, increasing by 25% in February after declining by a similar margin in January.
At MarquipWardUnited, a Phillips, Wis.-based maker of machinery for the corrugated and folding carton industries, requests for quotes from packaging manufacturers rose 39% in March from February, according to Trish Kempkes, the company's director of global communications. Kempkes said the requests for quotes are likely a response to two new products that are being offered to meet manufacturers' demand for higher energy-efficiency.
In Fort Atkinson, Wis., overall sales at Wisconsin Packaging Corp. are flat so far this year despite increases of up to 12% to the food industry and around 5% to the furniture industry, said President Fred Negus. Orders from the manufacturing industry are strengthening modestly, he said. Still, that's an improvement from the fourth quarter of last year for the company that employs around 65 people and produced some 200 million square feet of packaging material in 2012, he said.
In Hatboro, Pa., a suburb of Philadelphia, Acme Corrugated Box Co. is seeing good growth in orders, continuing the trend of the last six or seven months, said President Bob Cohen in the MNI report.
TAPPI
http://www.tappi.org/