The carton recession, which began last year when packaging demand hit lows not seen since 2009, is finally coming to an end, according to Bank of America. Initially, concerns arose when last year’s drop in demand for cardboard packaging was seen as a potential indicator of a broader pullback in consumer spending. However, recent surveys by Bank of America show an uptick in growth prospects for the packaging industry, dispelling fears of a prolonged recession.
While inflation has played a role in the increase in packaging prices, research also shows that demand expectations are driving growth. Over the next six to twelve months, 62% of respondents believe demand will be either “better” or “much better”, a significant increase over previous surveys. This positive outlook for the packaging industry bodes well for the broader economy, as it suggests that consumer spending remains strong.
The carton recession was feared to affect everything from the labor market to stocks last year. However, with the rebound in packaging prices, it seems that this fear may have been unfounded. This reversal is a welcome sign for businesses and investors alike and could lead to further growth and prosperity in the future.