Packaging prices are set to rebound, ending America's cardboard box recession, Bank of America reports.
Despite negative industry data since mid-2022, new surveys from the bank show a strong growth outlook for upcoming quarters.
This is positive for the broader economy, dispelling at least one recessionary indicator. Last year's demand for cardboard packaging dropped to 2009 lows, raising fears of a major consumer spending decline.
Charles Schwab labeled it a "cardboard-box recession" last June, warning of its potential impact on labor markets and equities.
Since then, both the economy and markets have generally exceeded expectations. Consumer spending has remained strong, contributing to record highs in stocks until recently.
Now, the packaging industry is also seeing improvements.
"Among the independent box makers we survey, growth outlook increased from 0.6% to over 3%, which is significant in my field," research analyst George Staphos told Yahoo Finance. "Moreover, respondents overwhelmingly expect prices to continue rising."
While inflation plays a part in this uptick, BofA's survey indicates demand expectations are also contributing.
Over the next six to twelve months, 62% of respondents foresee demand as "better" or "much better," compared to 39% in April.
