Box orders’ rise is good sign for economy
Packaging Corp. of America is hardly an economic bellwether, but a boost in orders at the box maker might be among the early signs the recession is easing.
The company reported this week that orders for boxes jumped sharply in the first 10 days of April. Chief Executive Paul Stecko told analysts that it seemed as if "somebody turned the light switch on," with orders arriving at a pace the company hadn’t seen in months.
But Packaging Corp.’s sales are just the kind of obscure data economists tend to examine to gauge the economy’s health. A jump in orders for boxes could mean consumer demand is finally starting to edge up, with shoppers drawing down inventories and manufacturers shipping goods to fill demand.
"Certainly this is a good sign," said Gus Faucher, director of macroeconomics at Moody’s Economy.com. "That’s an indictor that the free fall is coming to an end."
Packaging Corp.’s orders are the kind of indicator Bill Poole said he used to study when he was president of the Federal Reserve Bank of St instant payday loan. Louis, before retiring last year. Poole said he called friends in the private sector before attending meetings at which the Fed sets interest-rate policies. He said he usually called manufacturing and shipping companies because they tended to provide the best gauge of economic health. "If you want to look at where the action is, you concentrate on the goods economy," Poole said.
Rays of hope are clearly evident for Packaging Corp., based in Lake Forest, Ill. In the first 10 days of April, orders for corrugated boxes surged nearly 15 percent over March levels. Stecko said he couldn’t predict how long the uptick would last. "We’re just going to have to wait and hope this is the beginning of the pickup," he said.
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