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Paper Mills in the US - Industry Market Research Report

United States paper mills market: $48.4 billion industry by 2018


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2014-03-31 01:18:02 - Paper Mills in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com

The United States is no longer the world´s largest producer of paper, having been overtaken by China in 2008. It is estimated that revenue in the United States Paper Mills market has declined at an average annual rate of 2.7% to $49.4 billion in the five years to 2013.

Domestic revenue contracted sharply as the recession pulsed through key buying sectors in business and advertising. The industry has been unable to recover since the recession as the increased usage of online communication has cut demand for paper products. In 2013, revenue is expected to continue declining, falling 0.1% during the year due to continued weakness in the industry´s downstream markets.

While industry profit has increased modestly during the five-year period, from 1.5%

 

 

of revenue in 2008 to 2.9% in 2013; however, this growth is largely cosmetic. Industry margins are still historically low and remain below prerecession levels. Over the five years to 2013, wood pulp prices grew at an average annual rate of 1.9%, while industry product prices increased only 0.8% per year on average, forcing operators to absorb the difference.

Furthermore, poor economic conditions forced industry operators to exit the market or consolidate with other players. During the period, the number of paper mill operators declined at an average annual rate of 1.9% to 152 remaining companies.

The Paper Mills industry will face continued challenges over the next five years. Downstream demand for paper products will recover in the short term as the economy gains steam, but demand is expected to remain below prerecession levels. In the long term, demand is expected to continue falling as consumers increasingly substitute electronic recordkeeping systems for the industry´s paper products. Furthermore, as the dollar strengthens, competition from imports will increasingly squeeze domestic profit margins, encouraging industry operators to concentrate on high value-added papers. Overall, paper mills will remain in a state of decline, with revenue projected to fall at an average annual rate of 0.4% over the next five years to reach $48.4 billion in 2018.

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