US pallet stock to reach 2.6 billion units by 2019
The total number of pallets in use in the US will increase 1.9 percent annually through 2019 to 2.6 billion units, by gains in US manufacturing and warehousing activity. Demand for pallets is forecast to expand 1.7 percent per year through 2019 to 1.4 billion units. When production activity and shipments fell during the 2007-2009 economic recession, pallet users had a significant number of pallets sitting idle and opted to utilize the pallets on hand to satisfy product handling requirements, purchasing pallets only when absolutely necessary. This lowered the overall quality of pallet stocks, as pallets were not repaired or replaced at normal intervals. When the economy recovered, users began to re-place these pallets in disrepair with new units, resulting in pallet demand gains of nearly nine percent per annum between 2009 and 2014.
Wood to remain dominant pallet material
Wood will remain the most widely used material, comprising 84 percent of total pallet stocks in 2019 and 93 percent of the sales in unit terms. Wood strikes a balance between low cost and high durability and is suitable for use in most applications. However, because wood already accounts for such a large share of the total pallet market, opportunities for additional growth will be limited through 2019. On the other hand, materials such as plastic and metal, which account for substantially smaller shares of pallet unit demand, will record stronger market gains. Plastic is becoming particularly important in the food and beverage and pharmaceutical industries because of its resistance to biological and fungal infestation. In addition, plastic has a significantly longer lifespan than wood and can be completely recycled when taken out of service, which is an added benefit for users. Metal pallets, which make up the smallest share of pallet unit sales, will continue to be used in settings where there is a need to carry extremely heavy items or to transport products such as chemicals, which can damage other pallet materials.
New, refurbished pallets to grow at similar rates
Demand for new and refurbished pallets will grow at similar rates through 2019. This follows a 2009-2014 period that saw new pallet sales more than double from a low 2009 base, as new pallets were pur-chased to replace pallets in disrepair that remained in use during the economic recession. Such rapid gains will be bene-ficial to suppliers of refurbished pallets as many of the units that were purchased new in recent years will be repaired and resold as refurbished pallets. Further growth in the overall size of the wood pallet stock will provide additional sales opportunities for refurbished pallets.
Warehousing market to lead gains in pallet demand
Manufacturing will remain the largest user of pallets in the US, accounting for 72 percent of total pallet stock in 2019, as well as 70 percent of total unit demand. However, the warehousing and construction markets will post more rapid growth. The warehousing market will register the largest advances in unit terms due to both higher industry activity and increased use of pallet management service firms. Sales gains in the construction market will be supported by a rebound from a decade-long drop in construction spending in real terms.