SIC 2652 Setup Paperboard Boxes

SIC 2652

Establishments in this industry manufacture setup (rigid) paperboard boxes from purchased paperboard. This classification includes setup paperboard boxes, paperboard filing boxes, and metal-edged newsboard boxes. These products differ from other paperboard boxes in that they are not folded down, like corrugated boxes, and are shipped to customers in their final form.

NAICS CODE(S)

322213

Setup Paperboard Box Manufacturing

Setup paperboard box manufacturers comprise one of the smaller paper and board products industries. Sales have tended to increase and decrease sharply due to various market factors including economic conditions, inventory levels, and industry capacity. For example, the value of setup paperboard box product shipments grew a total of 18 percent from 1984 to 1994, increasing from $466.1 million to $554.9 million. While the average annual growth rate over this period was 1.8 percent, the setup paperboard box industry's sales performance was uneven. For example, after rising to $552 million in 1986, sales dropped dramatically the next year, to $436 million, before rising to a peak of $565 million in 1990. With the pulp and paper industry in recession in the early 1990s, shipment values of setup paperboard boxes dropped to about $430 million by 1993. By 1997 the value of shipments had recovered to $635 million, well above the 1990 peak of $565 million. After reaching a new record of $644 million in 1998, shipment values fell to $544 million in 2001, but rebounded the next year with shipments totaling $641 million. The U.S. Census Bureau reported shipment values of $606 million for 2005.

Since this is a small industry, some of the spikes in shipment values may be explained by changes in customers' inventory levels. If customers hold more product in inventory one year, they tend to purchase less the next year, even if their consumption rate is steady. However, an even more important factor is the price of the product, which tends to swing widely. The cost of materials rises and falls with the market price for paperboard, which during 1994 and 1995 rose as much as 50 percent before dropping in 1996. Paperboard costs remained relatively stable throughout the rest of the 1990s, not rising until 1999. Prices continued to increase into the early 2000s. These wide price swings help explain the volatility of shipment values in the setup paperboard box industry.

The production of setup...

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