Q3 Paper Outlook — Beaten to a Pulp

Recommendations Due

It also is expected to recommend courses of action to further work toward resolving the underlying barriers, she adds. The study's conclusions and recommendations are due to be released this month. (For more information, visit www.conservatree.com.)

As was noted earlier, one of the potential barriers is at least the perception that recycled grades cost more. It's understandable that pricing creeps into pretty much every discussion of printing papers, given data such as PIA's recent report that paper typically comprises 20 to 30 percent or more of a printer's sales revenues, depending on printing processes and products.

To help shops manage that cost, the association has begun offering a new Paper Price Tracking System to its members. "This new source will give printers recent information on paper prices, making them more informed consumers in dealing with paper companies and merchants," says Dr. Ron Davis, PIA's chief economist. The system will feature a direct interface to the Bureau of Labor Statistics' Producer Price Index (PPI) data for paper, which covers some 25 different grades, Davis notes. That data will be supplemented with findings from paper-related questions being added to the association's regular member survey, he adds.

Davis envisions the data being used as a sanity check on the prices printers are quoted by paper merchants and as an indicator of whether they should stock up on paper inventories or draw them down. The tracking system isn't intended to predict future paper prices, but the economist says he does plan to start offering some insights on the subject, as well.

"Even if the U.S. economy picks up toward the end of the year as expected, that may not put much upward pressure on paper prices because paper has become an international commodity," Davis notes. "I don't think the double-dip recession that is being talked about is going to happen at this point, but there are some serious issues dogging the recovery. The growth rate of the U.S. economy has slowed a little, but we still expect the second half of the year to bring a return to long-term growth of around three percent. That's if consumer confidence holds."