Ship Shape: Paper and Packaging Prices on the Rise
Specific input costs on the rise include wood pulp and paper. In fact, 2011 marked global wood pulp price's highest point in more than 30 years. Prices have faltered somewhat in the three years since, but global wood pulp prices remain at historically high levels. IBISWorld expects the global price of wood pulp to rise at an annualized rate of 1.0 percent in the three years to 2017, driven by increased demand from recovering economic conditions both domestically and abroad. Higher construction and industrial activity will require more wood pulp and other wood products, boosting prices. Drastic increases in input costs up the supply chain will likely be passed on to the buyer in the form of price hikes. For example, rising wood pulp prices are expected to flow through to the price of paper, which is anticipated to increase at an annualized rate of 2.1 percent in the three years to 2017.