If you have been in the packaging, containerboard or tissue sectors for the past 15 months, you are generally smiling already. Now, the economy is coming roaring back. For the first quarter, the US economy grew at a 6.4% annual rate. Last year, the economy declined by 3% while box shipments rose by 3.5%.
I am of the school that the containerboard market has broken free of its long-term linkage to the Purchasing Managers' Index. This link was broken by the consumers accepting as normal to receive goods personally delivered to them en masse. If this holds true and the manufacturing sector recovers, containerboard and the entire packaging sector is in for a (positive) wild ride.
Tissue suffered a bit when the hoarding stopped but expect tissue to stabilize at the long term consumption rates.
Barring unforeseen external issues, the balance of the year is going to be great.
Jim Thompson is CEO of Paperitalo Publications.