Soft Market Continues
"In terms of general market conditions, they are pretty soft. Demand is slack, at best. It has been a pretty tough couple of months since September 11. We are really anticipating a market that is going to continue to be challenging with soft demand and readily available supply," he adds.
The third and fourth quarters of 2001 saw a continued drop in paper prices, across the board, in response to an economy clearly in recession and as a result of the September 11 tragedies.
"Pre-September 11, there were lots of layoffs, the economy wasn't doing well and consumer confidence was low," continues Tannenbaum. "September 11 was a seismic event that made all those conditions all that much worse. All the uncertainty that people already had was highlighted by the terrorist attacks."
And the terrorist attacks seemed to only delay what appeared to be the beginning of an economic recovery. Paparozzi reports that prior to September 11, NAPL surveys showed there were some early signs that the economy might be beginning to stabilize.
"A lot of our indicators were beginning to stabilize. They were even beginning to climb in August 2001. Our Printing Business Index Activity Indicator had actually risen from a record low of 38.5 percent back in May, all the way up to 48.9 percent in August. In August—for the first time in almost a year—more of the printers that we surveyed reported that business was picking up rather than slowing down."
Tannenbaum agrees. "We were predicting that things might come back in late March and early April of 2002. We had seen some encouraging signs." But any hopes of an economic recovery were dashed on on September 11.
It should be noted, however, that while September 11 certainly had an impact on the economy, it was not the event that sent the economy into recession.