Economic conditions and policy changes over the last year have thrown a wrench into what some in the industry anticipated would be a recovery period for folding carton markets. That’s according to an executive summary for the Paperboard Packaging Council’s newly released 2025-2026 trends report, which was created by Fastmarkets RISI.
Headwinds such as tariffs, inflation, reductions in government benefits and declining consumer confidence contribute to concerns that demand for folding cartons “is confronted with an uncertain future,” the report states.
Boom and bust
Like many fiber packaging segments, folding cartons got a boost early in the COVID-19 pandemic when consumers were buying more goods. Folding carton shipments have grown at an average annual rate of 1.2% during the last five years, according to the report.
A second surge came in 2022 when low inventory levels across supply chains prompted a restocking boom, driving folding carton shipments to jump 11.6% from 2019 to 2022, the report says.
But the wave ended by 2023 when consumers shifted their spending habits again, partly to swing back to spending on services and partly due to inflation. Folding carton shipments dropped 4.8% in 2023 and 2024, according to the report. Demand has dropped 12.2% since the pre-pandemic peak in 2007.
Factors such as lower inflation and higher consumer spending spurred optimism for growth in 2025, yet other factors cropped up that ultimately tamped down consumer confidence. The uncertainty also hindered corporate investments as companies waited to see how policies would shake out.
“While there is still plenty of potential growth for spending to return to trend levels, the declining consumer confidence and rising inflation expectations will tighten consumer budgets in the near future,” the report says.
What lies ahead?
PPC projects that the slowdown in folding carton shipments will continue through this year but start improving in 2026.
In the near term, PPC expects that reduced Supplemental Nutrition Assistance Program benefits will pull down demand. Plus, more restrictive immigration policies will slow population growth, which would be another headwind to carton shipment growth.
Conversely, some changes could create more predictability for businesses and consumers, such as tax benefits included in the One Big Beautiful Bill Act. This could improve spending and output in 2026 and 2027, the report says.
PPC projects that folding carton shipments will grow from 2026 to 2029, with demand increasing by an average of 0.8% annually from 2024 to 2029.
