32 WESTERN PALLET
Looking Ahead to 2025: Trends, Predictions and Uncertainties
expected to grow by 0.8 percent in in manufacturing. After projected growth in manufacturing and services in the first half (H1) of the year, growth in the second half (H2) is projected to accelerate in manufacturing.
However, many analysts are hedging their bets, citing unusually high uncertainty surrounding regulatory, immigration, trade and tax policy. “We anticipate the economy will benefit from stronger private sector confidence and deregulation in the first half of 2025, but lower immigration and tariff increases. will represent inflationary growth headwinds in the second half of the year,” Deloitte cautioned in a recent article.
Lumber Outlook: Tightening Supply
Capacity decreases took center stage in 2024, and will present a tightening lumber market, which is expected to benefit lumber producers as we head into 2025.
Over 3 billion board feet of sawmill capacity closures were announced across North America in the first 10 months of 2024, after about 2 billion board feet between 2022 and 2023. Over 1.2 billion board feet of curtailments came from the U.S. South, which is usually the ‘low cost’ producing region.
One analyst estimates lumber demand in 2025 to increase about 1.5 billion board feet and given supply constraints, that 2×4 prices will rise about 20% to $490 for SPF and $465 for SYP. Fastmarkets notes that outlooks for 1Q 2025 were mostly positive, but the potential for tariffs, concerns about inflation, and interest rate uncertainty loomed large and have tempered expectations.
Manufacturing: Growth Expected
Expectations for 2025 are positive, according to the ISM survey. 60 percent of respondents expect revenues to be greater in 2025 than in 2024. Executives anticipate a 4.2-percent net increase in overall revenues for 2025, compared to a 0.8 percentage point increase reported for 2024.
As pallet industry participants look forward to a more prosperous 2025, we peer into our figurative crystal ball to steal a glimpse of what the new year might bring. Below we have aggregated insights to consider as you update your 2025 business strategy.
The Economy: Modest Optimism
Economic improvement in the United States will continue in 2025, according to purchasing and supply management executives in the December 2024 ISM Supply Chain. Planning Forecast Revenues are expected to increase in 17 of 18 manufacturing industries and 16 of 18 services-sector industries. Capital expenditures are expected to increase by 5.2 percent in the manufacturing sector (after a 5.6 percent increase in 2024) while employment is expected to grow by 0.8 percent in manufacturing. After projected growth in manufacturing and services in the first half (H1) of the year, growth in the second half (H2) is projected to accelerate in manufacturing.