World pallet market CAGR to grow 5% to 2020, driven by wooden pallets
wooden pallets,world market,CAGR
The global pallet market is expected to grow at a CAGR of 4.90% from 2016 to 2020, driven by the increase in manufacturing output as revival of the manufacturing sector and projected economic expansion worldwide boosts demand in the materials transport segment.
The Americas is expected to dominate the global pallet market in 2020 by accounting for a market share of almost 45%. Growth in the manufacturing sector, a rebound in the housing and construction sectors, and an increase in industrial output and exports are some of the factors that will contribute to the growth of the pallet market in the Americas during the forecast period.
Analysts say one trend that will spur market growth is vertical integration by companies.
As sawmills are unable to meet the growing demand for lumber used for manufacturing pallets is high in the construction and furniture industries, pallet manufacturers—such as Arrington Lumber and Pallet and Associated Pallet—are vertically integrating and investing in logging and sawmills. This enables them to offer high-quality pallets at an economical price.
The MAPI (Manufacturers Alliance for Productivity and Innovation) Foundation anticipates manufacturing production to outpace GDP between 2015 and 2016, after a fall in output from 2008 to 2009. Manufacturing production will continue to grow at 3.6% in 2016 and 2017. The uptick in manufacturing and resultant need to transport materials, including exports will drive the demand for pallets.
The wooden pallets segment accounted for an estimated 91% share of the market in 2015 to become the major contributor in the global pallet market. This segment of the market is thriving as the majority of the consumers prefer wood pallets owing to their versatile and cost-effective nature. The majority share of the demand for wood pallets comes from the food and beverage and consumer goods industries.