Forget Wall Street earnings reports or complicated GDP models - one of the better signals of the economy’s health might just be sitting in your recycling bin: the cardboard box.
Former Fed Chair Alan Greenspan was known to track what’s now called the “Cardboard Box Index.” Why? Because almost every product you buy - from clothes to electronics to groceries - spends time inside a box. In fact, 75–80% of all non-durable goods are shipped in corrugated containers. That makes box demand a surprisingly accurate proxy for the flow of goods through the economy.
When companies expect strong sales, they stock up on packaging. When demand weakens, orders for boxes dry up fast.
And right now, the box business is flashing a warning sign.
The Steepest Pullback Since 2008
Over the past few months, U.S. cardboard producers have announced closures and cutbacks that will slash about 9% of domestic production capacity - the steepest reduction since the 2008 financial crisis.
Major players are already reporting drops:
International Paper (IP) saw a 5% decline in daily shipments year-over-year.
Smurfit Westrock (SW) reported a 4.5% drop in North American volumes, its sharpest regional decline.
The U.S. cardboard industry is no small corner of the economy either. It’s roughly four times larger than the NFL by revenue. So when plants go quiet, the signal is hard to ignore.
What’s Driving the Slowdown?
The pullback is tied to a mix of uncertainty and weak sentiment:
Tariff confusion under President Trump’s mixed messaging has companies waiting to see how costs and demand will shake out.
Consumer sentiment remains near historic lows, hurting small-package shipping.
Retailers are bracing for a weaker holiday season, reducing packaging orders ahead of time.
UPS even pulled back its usual annual guidance, citing these headwinds.
The Ripple Effects
This isn’t just about fewer Amazon packages showing up at your door. A slowdown in cardboard cascades across industries:
Plant closures → job losses.
Lower shipments → trucking and shipping downturn.
Retail shelves → fewer goods stocked.
The last time box demand fell this sharply, the U.S. was headed into the Great Recession.
Why Investors Should Pay Attention
Cardboard shipments are a leading indicator - they often roll over before the rest of the economy does. While the slowdown is worth watching, I don’t believe this automatically means we’re headed for a recession.
Instead, it’s more likely a short-term reflection of tariff uncertainty and cautious retailers trimming holiday orders. Once trade policy clears up and consumer sentiment improves, we could see box demand rebound quickly.
For investors, this is a reminder to look beyond the headlines. Alternative signals like the Cardboard Index give us valuable context - but they’re just one piece of the bigger puzzle. The long-term drivers of innovation and growth remain firmly intact, and that’s where I continue to see the biggest opportunities.
When others focus on fear, I’m focused on the future - because that’s where the real gains will come from.
Here’s to the future,
Matt McCall
Editor, Market Insights
