How is the packaging industry recovering from COVID-19? - focus

GlobalData considers the packaging industry’s activity levels in the three months to the end of June and compares them to pre-pandemic.

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When it comes to post-pandemic performance, the packaging sector has emerged relatively weakly in the second quarter of this year.

In the three months to the end of June, activity levels in packaging were 13.6% higher than the same period to the end of 2019, prior to the arrival of the global pandemic. However, of the 18 industries featured in GlobalData’s analysis, the packaging sector ranks 11th in terms of its latest value for COVID-19 activity recovery.

Healthcare saw the highest sector activity levels in Q2 2021 compared to the last quarter of 2019, with the automotive, technology and apparel sectors making up the rest of the top four.

GlobalData's sector activity metric is derived from several of its research datasets. The composite index uses a combination of company-level data on job advertisements, deals, stock prices and sentiment analysis across financial filings and news reports.

One of the more traditional measures of tracking company - and industry - performance is through the value of company stocks. After a dip in Spring 2020, the average sector has been performing above pre-pandemic levels since early August 2020. However, the extent of each sector's recovery varies.

Generally, packaging stocks have overperformed the wider market in the past year, as highlighted above. By the end of June this year, stocks in packaging companies - as tracked by GlobalData - were 46.8% above their level in October 2019.

Hiring levels are also useful in determining how confident companies feel about the months ahead. GlobalData's jobs index tracks job openings across a raft of companies on a daily basis, allowing an assessment of confidence in real-time and a gauge of which sectors are feeling COVID's impact the hardest.

The number of job vacancies in packaging is currently lower than most other industries, relative to pre-pandemic norms. However, by 20 June - the latest date for which data is available - hiring levels were 18.6% higher than those recorded prior to the pandemic. The packaging sector ranks 14th of the 18 in GlobalData’s analysis.

In addition to stocks and jobs, the composite index also factors deals into account, tracking M&A as well as private equity and venture capital transactions. The higher the number of deals, the more optimistic the industry's outlook.

Compared to pre-pandemic levels, the volume of financial deals in packaging has been lower than most other industries over the last 19 months. By the end of June this year, packaging deals were 11.9% lower than in October 2019. This places the sector 14th out of 18 on current deal volume recovery.