Consumer Goods and Electronics
Packaging to See Stable Growth in 2015
Real disposable income grew at an above-average rate from December 2014 to March 2015, however the growth rate decelerated in February and March. So, while there was a spurt of decent growth in incomes at the beginning of 2015, it seems likely that incomes are close to or have reached their peak rate of growth.
Real disposable income is a good leading indicator of real consumer goods spending, and the softening growth in incomes is already starting to show up in consumer goods spending. Despite growing 5.1 percent in January, which was the fastest rate of growth in consumer goods spending since February 2011, the annual rate of change in consumer goods spending slowed in March. It looks like this trend will continue in the upcoming months.
Changes in spending tend to lead changes in consumer goods production (and consequently packaging) by three to six months. Even though consumer goods spending had been growing faster until just recently, consumer goods production has been growing at a slower rate since September 2014. It’s possible that the recent spurt in consumer goods spending could lead to stronger consumer goods production (and an increased demand for packaging), but I think it’s more likely that consumer goods production will continue to see slower growth, as the economy appears to be softening overall.