Taking Stock
In looking back on 2001, the state of the pulp and paper market can be best described as volatile. And as the strains of "Auld Lang Syne" fade away, the outlook does not appear to be any more stable for the coming year. In fact, due to the dipping economic outlook that many pundits predicted months ago, paper buying has taken on a renewed set of competitive objectives starting foremost (and not surprisingly) with affordability. Since slower publishing demands contributed to a waning paper market throughout 2001, according to the Labor Department's International Price Program, buying habits have been greatly affected. Coupled with international conflict and national security concerns, the commercial feasibility of a market as traditional as book publishing comes under the gun. Sluggish book sales during the holiday season certainly did not help matters, leaving the future of the paper market in 2002 to much speculation.
According to Mead (www.mead.com), "Americans use an average of 749 pounds of paper products per individual per year. Overall, that's about 187 billion pounds of paper for the United States as a whole!" Additionally, paper production accounts for seven percent of the total manufacturing output in the U.S, employing 1.4 million Americans, Mead reports. The industry generates $200 billion in sales annually.
"There is no doubt, however, that the tragic events of September 11 have placed additional stresses on consumer confidence in an already weak economy," admits John Dillon, International Paper's chairman and CEO. "Like many other companies, we experienced business interruptions during the week of the terrorist attacks. The long-term impact on our company resulting from those events is still undetermined."
The paper trail
When asking most print buyers about the market, answers are hard-pressed to define paper as "cheap." In the short-term, predicting this year's market hinges upon—what else but "the economy, stupid." This financial uncertainty proves that in many cases, the corporate paper end game is in the hands of the much more generalized economy, not just publishing components. That's why paper companies are having to find even more ways of competing.
