Printing & Writing Papers Recovering

Looking at statistics for the printing and writing paper market it appears that this segment of the paper industry is in the midst of an extended drought. However, according to a presentation given during the American Forest and Paper Association’s Paper Week program, the P&W market is on a road to recovery.

John Maine, with RISI, a company focusing on the economics of the paper industry, trends, production figures and operating rates at mills in both North America and Europe are showing the preliminary signs of a turnaround.

Maine lists off several reasons for this optimism, including interest rates at a 40-year low; the stimulation from the tax cuts and an increase in government spending; productivity growth at record highs; the fact that real wage growth is healthy; and the dollar is falling, which will boost exports and restrain imports.

Emphasizing the report, Maine says that “The U.S. economy will not go in double dip recession.”

Turning to Europe, while the dross domestic product is growing at a near zero rate, there will be a bounce, although the return in strength will not be as strong as the recovery from the United States.

Looking at different sectors, RISI says that his company expects magazine ad sales to be up 3 percent this year; newspaper lineage growing 9 percent; and coated paper demand to remain strong.

While there have been some preliminary signs of an improvement in the P&W market, Maine feels that the first half of this year will be somewhat sluggish. However, by the second half of this year and into next year markets should be in much better shape.

One caveat, Maine adds, is that assuming a war with Iraq takes place, if the hostilities go on for an extended period of time the economic model changes significantly, and issues such as a double-dip recession become more likely.