Various economic indicators provide insight into the health and direction of the global economy. From jobs and earnings reports to consumer confidence polling, analysts consider wide-ranging data to evaluate and identify economic strengths and weaknesses. In addition to GDP, retail sales figures, and other familiar metrics used to assess economic vitality, experts also consider specific aspects of the supply chain, before drawing conclusions. Among the areas closely studied, contract packaging trends offer valuable information about the health of the economy.
Corrugated packaging demand is closely tied to how many physical goods are being produced, shipped, stocked, and delivered. When box shipments soften, it can reflect slower merchandise movement, leaner inventories, and more cautious ordering behavior. While packaging is not a perfect predictor of GDP, it often reacts faster than many headline economic reports.
Cardboard Demand Offers Economic Insight
Because corrugated packaging plays such a prominent role transporting and merchandising a majority of consumer products, studying demand for cardboard packing materials has become a common and effective way to track consumer spending behavior and its subsequent economic impacts. A direct correlation can be drawn between the overall amount of cardboard packaging used and the volume of goods moving through the supply chain. Unfortunately for US economic interests, including contract packagers, cardboard demand is down.
If packaging orders and containerboard output remain weak, it can reinforce signals already visible in other areas like retail inventory posture and goods-related freight activity. It’s best interpreted as a confirming signal, not a standalone forecast.
Estimates indicate 75-80% of consumer goods spend time in corrugated cardboard shipping boxes. Playing an integral role in the delivery of goods, the “cardboard index” is a legitimate and proven short-term indicator for measuring overall consumer spending confidence. Healthy demand for shipping boxes generally reflects robust trade flow and strong consumer spending, while waning need for cardboard packaging materials indicates less overall activity in the consumer sales stream.
Packaging trends may offer particularly valuable insight because of the important distinction between lagging and leading economic indicators. Lagging indicators account for past events, measuring what has already happened, whereas leading economic indicators such as new orders and packaging demand look to the future, anticipating upcoming conditions.
Packaging Demand Downturn Reflects Tariff Uncertainty
Contract packaging companies and cardboard producers are navigating unusual post-COVID conditions that have seen demand drop substantially from peak pandemic levels. US box makers have shut down nearly 10% of production this year, resulting in job losses and plant closures. Inflation in the cost of raw materials and overhead have added further incentive to streamline, prompting producers to reduce output capacity. Similar production downsizing has not been seen in the cardboard box business since the global downturn of 2008, drawing sharp concerns the US is headed for deep recession.
“It is pretty resounding, this uncertainty… People are kind of freezing because they don’t know what to do.”
Multiple recent pulp mill closures within the US illustrate reductions to US paper packaging production infrastructure, but domestic competition is not responsible for the upheaval within the cardboard industry. Rather, stalled trade relationships and export uncertainty have come to bear on packaging demand. Trade policy uncertainty (including tariffs and retaliation risk) can suppress export-linked packaging volume by discouraging forward orders and reducing predictability for shippers and manufacturers. 10-15% of US cardboard production capacity facilitates the country’s export shipping needs. Contractions in this segment of the corrugated industry are expected to continue and perhaps worsen in 2026.
Converging Conditions Prompt Packaging Industry Shifts
Half of recently surveyed box manufacturers confirmed a downward trend for packaging orders, indicating demand had worsened, when compared to three months earlier. Although current contractions do follow a period of rapid expansion experienced during the pandemic, cardboard demand has actually slumped to pre-pandemic lows not seen since 2016.
In addition to the impact of tariffs, multiple factors undermine packaging sales in today’s shifting marketplace. Weak consumer spending, dysfunction within the housing market, and general caution among supply chain stakeholders are key concerns slowing orders for packaging producers. Although some of the recent mill closures have been attributed to market repositioning, rather than direct responses to diminished demand, sellers are changing fulfillment strategies to reflect the “new normal.” Ecommerce leaders such as Amazon have moved to lightweight mailers and right sized packaging to reduce their dependence on cardboard.
Packaging Orders Fall Flat During Holiday Shopping Season
Fibre Box Association data showed U.S. corrugated box shipments in Q3 2025 hit their lowest third-quarter level since 2015, an unusual pattern heading into the holiday build season. While third-quarter shipments typically ramp-up for the busy holiday spending season, this year’s lead-up has been marked by orders below normal levels. Viewed as a direct demand indicator, flat packaging sales indicate weak consumer spending and also illustrate cautious expectations among retailers, which may be reluctant to over-invest in seasonal inventory.
Containerboard, the primary raw material for corrugated production, saw third quarter output slump more than 3% year-on-year, resulting in low utilization rates for producers. Weak demand and downward production trends in Q3 served as warnings to stakeholders on every level of the supply chain, and the information gleaned from box sales figures may also point to pending problems in the US economy.
Looking beyond the impacts of short-term movement within the packaging industry, cardboard demand is also shifting on a fundamental level. Per-capita box use has thought to have dropped by at least 20% since peak usage levels in 1999. This trend toward reduced consumer cardboard use underscores the importance of alternative fulfillment formats, right-sized packaging, and innovative, efficient, package design strategies.
Declining consumer demand creates a ripple effect across packaging and logistics industries, resulting in complications such as supply chain bottlenecks and cost increases. As sellers respond to soft consumer demand with inventory adjustments, shippers, packagers, and warehouse operations follow their lead. Facing shifting conditions and diminished demand, agile, adaptable contract packagers are adjusting their approach to incorporate cost-saving innovation and efficiency. Time will tell whether or not today’s weak packaging demand signals tomorrow’s economic crisis.
