Living Economics

Cardboard Box Index
The order for cardboard boxes is a reliable indicator of the business cycles.

According to the Fibre Box Association, shipments of cardboard boxes fell 3.5 percent in the second quarter of 2008, compared with a year earlier. Then they fell 3.3 percent in the third quarter. After that, the bottom fell out: Shipments fell 9.9 percent in the fourth quarter compared with a year earlier.

In 2009 corrugated box shipments have fallen, on a year-over-year basis, 5.1 percent in January and 8.3 percent in February.

This is bad news for the US economy trying hard to get out of its deep recession. Since nearly 80% of all non-durable goods are shipped in cardboard boxes, a strong economy would have required a rising demand for cardboard boxes.

Indeed the shipment of cardboard boxes is closely watched by economists in the Federal Reserve as one of the leading or coincident economic indicators.

But there may be light at the end of a dark tunnel. The Chairman and CEO of Packaging Corp reported that orders of cardboard boxes for the first ten days of April were up almost 15% over March, and about equal with April 2008. That was the first pick up in demand since September 2008.

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