The packaging market in France is stagnating and growth prospects look bleak. This is due to a direct dependence on the general state of the economy, industrial production and construction. According to data from the Ministry of Economy and Finance, industrial production in the country in January 2024 decreased by 1.1% per month, and the situation in construction turned out to be even more depressing with a drop in the number of housing construction permits by 21.8% over the year.
After a short-term surge in activity following the pandemic, pallet, crate and container manufacturers are facing a sharp decline in demand by mid-2023. Anna Pic-Roulant from Gers SCI Pal reports a sudden stop in orders and no signs of a market recovery. Some manufacturing companies are experiencing difficulty selling inventory due to the slow pace of work, which can lead to a 30-35% drop in annual revenue and a decline comparable to the 2008 crisis.
The construction sector is facing additional challenges due to some government measures that are not conducive to the development of the industry. Declining industrial production in France, as well as in other European countries, particularly Germany, which entered recession in 2023, is putting pressure on the market. As a result, prices for finished and semi-finished products are falling sharply. Prices for pallet wood are down nearly 20% year over year, and spruce-fir and poplar, used for packaging, are also seeing significant declines.
Fabien Sallet, manager of a sawmill in Massif-Central, confirms that prices for his products have fallen by 20-25% compared to the exceptional year 2022. However, despite the gloomy prospects, he does not consider the future completely hopeless. The end of the year was tough, but he saw some recovery in late March and early April with an increase in orders. The coming months will show whether this was a temporary improvement or the beginning of a recovery.
