Wood Container and Pallet Manufacturers NAICS 321920

Jun 3, 2025 - Headwinds to Slow US Manufacturing Growth

• US manufacturing growth is expected to slow in 2025 amid trade strife, inflation, and geopolitical uncertainties, according to the Institute for Supply Management’s Spring 2025 Supply Chain Planning Forecast. Manufacturing revenue is forecast to rise by 0.1%, 4.1 percentage points below the ISM’s previous forecast released in December 2025. Just over a third of the ISM survey respondents said they expect revenues to increase in 2025, 22% said revenues will fall, and 44% expect no change. Capital expenditures are projected to decrease by 1.3% in 2025, a significant drop from a 5.2% rise forecasted in the ISM’s December 2024 report. Manufacturing activity is a leading 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.

• On March 12, the Trump administration levied a 25% tariff on all steel and aluminum imports, which includes certain derivative products, according to Pallet Enterprise. The typical pallet manufacturer has seen nail costs rise between 5% and 10%, and some believe prices could increase further. However, industry insiders warn that stockpiling nails as a hedge against further price rises risks being stuck with high-cost inventory if tariffs are lifted and prices come down. In response to US tariffs, the European Union has proposed tariffs on several types of US wood products, including casks. However, pallets and wood boxes are not currently on the EU’s proposed list of products facing increased tariffs. In late May, Trump announced that he planned to increase the tariff on all US steel and aluminum imports to 50%.
• Exchange operator CME Group began trading in Southern yellow pine futures on March 31, 2025, according to The Wall Street Journal. The move comes as more sawmills migrate from Canada to the US to mitigate the effects of rising tariffs. Giving US-grown Southern lumber their own futures contracts will allow sawmills and wood-consuming industries to better manage their exposure to price fluctuations. Before the launch of Southern Yellow Pine Futures (ticker: SYP), lumber futures excluded southern pine and were based on deliveries of Northern conifer boards, much of which were Canadian spruce, pine, and fir. The new Southern yellow pine futures will be settled in cash, allowing speculators to trade without holding lumber inventories.