Wood Container and Pallet Manufacturers NAICS 321920

Feb 5, 2026 - Capital Goods Orders Rise

• Solid growth for new orders of US capital goods may signal steady demand for wood containers and pallets. New orders for key U.S. capital goods rose more than expected in November, marking a fifth straight monthly gain and signaling steady equipment spending as the economy continued its strong fourth quarter performance, according to the US Commerce Department and reporting by Reuters. Core capital goods orders, excluding aircraft and defense products, increased 0.7%, supported by resilient business investment despite President Donald Trump’s tariffs, which have weighed on parts of the manufacturing sector. Shipments of core capital goods increased 0.4%, building on October's 0.8% gain.
• US manufacturing activity expanded in January 2026 for the first time in 12 months, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in January rose to 52.6% from a reading of 47.9% in December. A reading above 50% indicates manufacturing expansion. January's New Orders Index decreased by 9.7 percentage points to 57.1%. The January Production Index rose 5.2 percentage points to 55.9%. Despite the return to PMI growth in January, several individual respondents to the ISM survey suggested that demand in the factory sector is being affected by economic uncertainty caused by the unpredictable nature of US tariff policy. Manufacturing activity is a key driver of demand for wood containers and pallets.

• Wood container and pallet manufacturers may experience margin relief as log and lumber prices drop. On January 2, lumber futures traded around $590 per thousand board feet, nearly matching September pricing, the lowest level this year, according to Trading Economics. Weak pending home sales in December dampened hopes of a housing demand resurgence for the spring homebuying season. Lumber distributors reported slower ordering activity, while sawmills maintain production levels to boost inventories.
• 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.