Wood products
MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it believes the US is at the beginning of a mild recession, which casts a shadow over the 2008 outlook for the country's paper, paperboard, and packaging industry.
S&P said as a recession looms, the way US forest products companies manage, any decline in demand will be crucial to credit quality over the next year.
The ongoing weakness in new residential construction will continue to hurt the financial performance of wood products manufacturers through 2008, it added.
'With our expectation of a 30 pct drop in annualized housing starts from the 2007 level, we don't see a meaningful recovery in wood products pricing anytime soon,' S&P said.
Additional consolidation, closures and paring of businesses are likely and will have varying effects on credit quality, it added.
S&P said as a recession looms, the way US forest products companies manage, any decline in demand will be crucial to credit quality over the next year.
The ongoing weakness in new residential construction will continue to hurt the financial performance of wood products manufacturers through 2008, it added.
'With our expectation of a 30 pct drop in annualized housing starts from the 2007 level, we don't see a meaningful recovery in wood products pricing anytime soon,' S&P said.
Additional consolidation, closures and paring of businesses are likely and will have varying effects on credit quality, it added.
