Rising input costs and recession in the economy to dent US packaging industry

30-Jul-08

The US packaging industry is likely to face a rough road ahead towards the end of 2008. The major factors leading to this situation are the record hgh raw material costs, recession in the US economy and rising fuel prices. All these factors accumulated are expected to mar the earnings of the packaging companies especially those who are locally based without a global reach outside the region. Going by Standard & Poor's ratings, roughly 35% of the packaging companies are eyeing markets outside the US and spreading their wings into Eastern Europe, Latin America and Asia to compensate for the ailing demand in the country. Consumers will curtail spending on food items due to higher prices which will indirectly affect the packaging industry. Polyethylene and polystyrene prices climbing higher along with record high fuel prices is sure to make a dent on the earnings and working capital of the packaging companies towards the latter period of 2008.