Economic Outlook

Staff -- Converting Magazine, 12/1/2000

Manufacturers' shipments of nondurable goods decreased 0.4% between Aug. and Sept., following a 0.8% increase the month before. The value of new orders also declined in Sept., although by a smaller 0.2%. The estimated value of Sept. 00 nondurable shipments was 5.4% above Sept. 99, while the over-the-year gain in orders was 5.7%. Through nine months of this year, food product shipments were valued just 2.1% ahead of the total for the first three-quarters of 99. Meat and beverage shipments have been fairly strong throughout 00, but the value of dairy products shipped has been consistently lower this year than in 99. Drugs/soaps/toiletry shipments through Q3 were almost 10% ahead of the total through Q3 99 . The economy has slowed in recent months and average prices rose more slowly this fall than in Q1 and Q2 00. Consequently, nondurable shipments growth should continue to ease through mid-01.

Converting's exclusive packaged goods price index (PGPI) inched ahead 0.1% between Sept. and Oct., following a 0.3% decline the month before. The sharpest over-the-month price increases were posted in the alcoholic beverages (+2.8%), soaps/detergents (+1.6%), and shortening/cooking oils (+1.2%) product groups. Among the components recording price declines over the month were floor coverings (-0.8%), textile housefurnishings (-0.7%), and soft drinks (-0.6%). Over-the-year price increases have been largest for household flatware (+4.0%), soft drinks (+3.8%), sanitary paper products (+3.5%), and alcoholic beverages (+3.4%), while the sharpest price declines have been recorded in the cooking oils (-5.6%) and household appliances (-2.1%) product groups. We would expect that over-the-year increases in the PGPI will continue to ease over the final two months of this year and into Q1 01.

Behind The Numbers

Average packaging product leadtimes moved moderately higher between Q2 and Q3 00. Compared to the Q2 00 average, leadtime averages for 3 of 7 product groups moved higher in Q3 00. At 3.8 weeks, the Q3 lead-time average for the laminates group was the highest of the seven categories we follow. Changes between Q2 and Q3 lead-time averages for the other product groups were comparatively small. With the preliminary Oct. numbers, we see an easing in lead times from year-to-date averages. Thus, we'd expect faster deliveries during Q4 00 and into early 01 then we've seen through most of 00. Average order-to-fulfillment times as measured in a monthly survey by NAPM had fallen for six consecutive months through Oct. 00. In the latest NAPM Backlog of Orders Index, only 14% of respondents reported an increase in backlogs between Sept. and Oct. while 32% reported smaller backlogs, and 54% saw no change.

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