June 2008

Carton Trends - Quarterly survey of trends in the cartons industry

HIGHLIGHTS

• The survey delivered mixed messages about the state of trade during the past quarter While several of the negative balances were lower than forecast, the expectations of respondents for the quarter were largely disappointed.
• All of the respondents are working below capacity and the highest percentage since the survey began reported order books worse than normal for the time of the year.
• Positive balances for selling prices both in the past quarter and forecast for the coming three months hide the fact that the increases were generally insufficient to cover the range of costs that increased last quarter or are forecast to rise this quarter.
• The forecast of a return to a positive balance for margins on sales largely depends on an increase in volumes, perhaps to be won from other respondents, combined with continuing to work smarter.
• While there is a negative balance for capital expenditure on plant and machinery, several respondents intend to replace litho presses during the period primarily to make efficiency gains rather than to add to capacity.
• The respondents who export agree that export orders are better than normal for the time of the year and that export prospects will improve over the next three months.

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