U.S. Demand for Pallets Rising 3.5% Annually

Sales of new and refurbished pallets will expand 3.5 percent per year through 2017 to 1.3 billion units, valued at $16.9 billion, according to a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm. The “Pallets” report states that a more favorable economic climate will induce companies to discard aging refurbished units and purchase new ones, fueling stronger sales growth.

Block pallets are expected to make up a larger share of the market total, and growing numbers of manufacturers will replace their existing stringer pallets with new block units.

Wood pallets are by far the most commonly used type.  Metal and plastic pallets, however, will register more impressive sales gains.  Metal pallet demand will rise at the fastest pace of any product type through 2017 due to a large build-up in idle stocks during the 2007-2009 recession and the generally slow economic recovery that followed.  As manufacturers’ shipments fell between 2007 and 2009, metal pallets were taken out of active stocks and put in storage because they represented too significant of an investment to be simply discarded.  As output levels recovered, these idle metal pallets were used to meet product requirements, severely limiting new pallet sales in 2012.  Through 2017, sales will advance rapidly from the low 2012 market base as idle stocks are eliminated and new units are purchased to bring the number of pallets available for use to required levels. 

Plastic pallets have seen the strongest advances in percentage terms historically, and they will continue to record above average stock and demand increases.  Plastic pallets last for many years and are fully recyclable, allowing producers to tout both their lower lifecycle costs and environmental friendliness.  Over the long term, increased use of metal and plastic pallets will reduce annual product demand requirements relative to stock, because of their longer lifespans than wood pallets.  However, metal and plastic pallets’ current market share is so small that the effect on overall pallet sales through 2022 will be minimal. 

 © 2013 by The Freedonia Group, Inc.