Wood Container and Pallet Manufacturers NAICS 321920

Aug 4, 2025 - Wood Container and Pallet Manufacturers

• Logistics trends and increased automation could lead to less pallet demand by the warehousing industry, according to Pallet Enterprises. Industry insiders have noticed some distribution centers still use pallets for inbound and outbound shipments but have reduced or eliminated pallet use in warehouse management as the industry relies more on automated systems. Increasingly, warehouses are using more automated storage and retrieval systems (AS/RS) that leverage shuttles, load-carrying robots, vertical-lift modules, and robotic pickers. Rather than full pallets, AS/AR systems rely on smaller containers, such as totes, bins, and cartons. However, smart pallets that integrate with warehouse management systems - including sensor-equipped racks, real-time inventory tracking, and dynamic slotting - represent an industry opportunity.
• US manufacturers’ shipments of durable goods, a demand indicator for wood containers and pallets, increased 0.5% in June from the previous month, and were up 1% compared to June 2024. New orders for durable goods, a signal of future wood container and pallet demand, decreased 4.8% in June from May but rose 6.6% over June 2024 levels. The June drop in new orders was chiefly due to a 51.8% decline in demand for nondefense aircraft and parts, following a surge in new aircraft orders in May. The Trump administration’s tariff policies may also be weighing on the US manufacturing sector, according to Reuter’s

• US manufacturing activity contracted in July 2025 for the fifth consecutive month, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in July fell to 48% from a reading of 49% in June. A reading above 50% indicates manufacturing expansion. July’s New Orders Index decreased by 0.7 percentage points to 47.1%. The August Production Index rose 1.1 percentage points to 51.4%. Several respondents to the July ISM survey said their businesses faced tariff-related purchasing and supply chain challenges. Of the 18 manufacturing industries tracked by the ISM, eight reported growth in July: apparel, leather, and allied products; nonmetallic mineral products; textile mills; miscellaneous manufacturing; furniture and related products; and primary metals. Industries reporting contractions in July included printing & related support activities; paper products; chemical products; machinery; wood products; fabricated metal products; computer and electronic products; transportation equipment; electrical equipment, appliances, and components; and food, beverage & tobacco products. US manufacturing activity is a demand driver for wood containers and pallets.
• In early June, the Paris-based Organisation for Economic Co-operation and Development (OECD) downgraded the growth outlooks for the global and US economies, according to Reuters. Citing the Trump administration’s trade policies and resulting economic uncertainty, the OECD said the global economy is forecast to grow 2.9% in 2025 and 2026, down from 3.3% in 2024. The OECD expects the US economy to grow 1.6% this year and 1.5% in 2026, revised downward from a previous forecast which projected 2.2% growth in 2025 and 1.6% in 2026. The OECD’s calculations assume that tariffs in place in mid-May will remain until the end of 2026. The economic outlook could worsen if trade strife intensifies and triggers inflation and supply chain disruptions, according to the OECD. On May 29, the US Court of International Trade (CIT) ruled that the Trump Administration overstepped its authority in levying widespread tariffs and voided most of them, according to the Wall Street Journal. The following day, the US Court of Appeals for the Federal Circuit paused the CIT ruling pending further arguments. The Supreme Court could ultimately decide the case. In the meantime, the tariffs remain in place. Trade disruptions and reduced economic growth could hurt demand for wood containers and pallets.