PLA conducted an in-depth analysis of seven macroeconomic and industry-specific indicators to evaluate their influence on pallet demand and pricing. These indicators include manufacturing inventories, imports, retail inventories, consumer spending on goods, lumber pricing, OCC/recycled paperboard pricing, and retail sales. Below is how each of these indicators performed in Q3 2025, what early Q4 signals show, and what this means for recycled pallet demand and pricing heading into year-end.
Key Takeaways: Q4 2025 Recycled Pallet Market Insights
PLA analyzed seven high-impact indicators closely linked to recycled pallet demand and pricing. Here is how each performed in Q3 and what emerging Q4 data suggests.
- Manufacturers’ Inventories held steady in Q3, and early Q4 readings from the ISM Manufacturing Report show contraction, suggesting leaner customer-side stocks and a mild downward risk to pallet demand.
- Imports surged in July and August before easing in September, according to Descartes Datamyne, signaling a front-loaded quarter. Early Q4 import data shows continued softness, which may temper pallet flows at ports and DCs.
- OCC/Recycled Paperboard Pricing rose modestly in Q3 (+0.8%) and remains up 6% YoY. Since OCC pricing tends to track recycled pallet pricing closely, stability here supports firm pallet prices into Q4. See the recycled paperboard index on FRED.
- Retailers’ Inventories were steady in Q3, but ISM’s Inventory Sentiment Index continues to show retailers feel stocks are “too high.” Expected Q4 trimming could support pallet pricing.
- Consumer Spending on Goods was positive but slowed through the quarter, with most growth driven by services, per the latest BEA report. Early Q4 forecasts from Deloitte and Mastercard suggest value-driven buying for the holidays.
- Lumber Prices dipped slightly in Q3 but remain nearly 5% higher YoY, per the Producer Price Index for Lumber. Market reports show stable-to-firm pricing heading into Q4, maintaining upward pressure on pallet input costs.
- Retail Sales grew modestly in Q3 and continue to rise in early Q4. The National Retail Federation expects holiday 2025 sales to exceed 1 trillion dollars for the first time, supporting steady pallet demand in essential and online channels.
Bottom Line: Q3 pallet demand was steady across most sectors. Early Q4 signals point to a market shaped by leaner inventories, firm core material costs, moderated imports, and resilient consumer demand. Together, these factors suggest stable recycled pallet pricing into year-end, with limited downside unless a broad demand slowdown materializes.
Q3 Performance Analysis and Q4 Forecast
Below is a detailed look at each of the seven indicators PLA tracks for their relevance to pallet demand and pricing.
Manufacturers Inventories
Manufacturers’ inventories measure the value of goods factories have on hand at month-end and are one of the strongest indicators of pallet demand. Learn more about this relationship here.
Inventories in Q3 were essentially flat, reflecting cautious stocking behavior as firms matched production closely to orders. September inventories ended at $946.8 billion, and the quarterly average was nearly unchanged from Q2. This stability occurred even as new orders rose and backlogs increased, which typically indicates controlled production rather than excess accumulation.
Early Q4 signals show further tightening. The ISM Manufacturing Inventories Index fell to 45.8 in October (contraction), while Customers’ Inventories remained in “too low” territory. Both point to ongoing downstream drawdowns.
What this means for the pallet market: Q3’s stable factory inventories supported baseline pallet demand. If early Q4 drawdowns persist, pallet usage may soften modestly in upstream manufacturing channels, though essential goods and replenishment cycles should keep core demand steady.
Imports
Imports represent the flow of goods entering the U.S. and are tied to pallet usage across ports, drayage, transload, and distribution centers.
Q3 imports were mixed. July and August brought strong containerized import volumes (above 2.3 million TEUs), but September imports fell 8.4% from August after tariff-driven front-loading earlier in the summer.
Early Q4 data shows continued softness. October volumes were flat month-over-month and 7.5% below October 2024, and November imports were down 7.8% year-over-year, with particular weakness from China.
What this means for the pallet market: Import-driven pallet demand peaked mid-Q3 and has cooled, reducing upward pressure on pallet prices for Q4. However, normalization following tariff-driven spikes is expected rather than a structural downturn.
OCC / Recycled Paperboard Pricing
This indicator reflects mill pricing for recycled paperboard and closely tracks OCC, which is highly correlated with recycled pallet pricing. See the index on FRED.
Recycled paperboard pricing rose 0.8% in Q3 and stands 6.1% higher YoY, signaling continued firmness despite declining fiber input costs. While OCC prices have fallen significantly year-over-year (around 40% per Recycling Today), mills have not passed these savings downstream, keeping finished recycled paperboard costs elevated.
Because recycled pallet pricing tends to track OCC movements, not paperboard input costs, the current stability in OCC and recycled paperboard PPI supports steady pallet pricing as Q4 begins.
What this means for the pallet market: Stable recycled paperboard pricing aligns with stable OCC pricing, indicating continued firmness in recycled pallet prices through Q4.
Retailers’ Inventories
Retailers’ inventories measure goods held at the retail level and typically have an inverse relationship with pallet pricing. Read more about this linkage here.
Q3 retail inventories were effectively flat. But the ISM Services Inventory Sentiment Index remains above 60, indicating retailers still feel inventories are “too high.”
Trade publications report that many retailers entered the holiday season with cleaner inventories and tighter assortments, focusing on turns rather than broad seasonal buildup.
What this means for the pallet market: Lean Q4 stocking behavior typically supports pallet pricing. If retailers continue trimming inventories into December, pallet demand may shift from inbound replenishment to outbound order fulfillment, which is generally positive for recycled pallet usage.
Consumer Spending on Goods
Consumer spending on goods tracks inflation-adjusted household purchases of physical products. See BEA’s latest report here.
Q3 saw continued but slower growth in goods spending. September goods spending increased only slightly, with most overall growth driven by services. Higher-income consumers remain the primary driver of goods purchases, while value-oriented behavior is spreading across categories.
Holiday spending forecasts from Deloitte and Mastercard project positive but more price-sensitive growth, with consumers trading down and leaning into promotions.
What this means for the pallet market: Slower but stable goods spending supports steady pallet demand into Q4. Essentials will anchor flows even as discretionary volumes show caution.
Lumber Pricing (PPI Lumber)
Lumber pricing uses the Producer Price Index for Lumber. See the index on FRED.
Lumber PPI fell slightly in Q3 (–2.5%) but remains nearly 5% above last year, reflecting a stable but elevated input-cost environment for new pallet manufacturing. Spot lumber prices in early Q4 (around $550 per 1,000 board feet) suggest stability with mild firming, according to dealer reports and Madison’s Lumber.
What this means for the pallet market: Lumber’s Q3 softness provided limited relief, but elevated YoY pricing and firmer Q4 markets keep upward pressure on pallet costs, supporting firm recycled pallet pricing levels.
Retail Sales
Retail sales measure consumer purchases at the retail level and are a direct driver of palletized product movement. Latest Census data available here.
Q3 sales grew modestly on both a month-to-month and year-over-year basis. Early Q4 reports remain positive. The National Retail Federation expects 3.7% - 4.2% growth for the 2025 holiday season, surpassing 1 trillion dollars for the first time.
What this means for the pallet market: Steady retail spending supports consistent pallet utilization, especially in food, beverage, household goods, and e-commerce fulfillment centers.
Bottom Line: What Q3 and Early Q4 Economic Performance Means for Recycled Pallet Pricing
Across all seven indicators, Q3 revealed a steady goods-movement environment with balanced demand, leaner inventories, and firm input costs. Early Q4 signals point to stable-to-slightly-lower inbound flows, firm OCC and lumber pricing, and healthy but value-driven consumer spending.
Taken together, these conditions suggest:
- Stable pallet demand through Q4, with normal seasonal peaks in food and e-commerce
- Firm recycled pallet prices, supported by OCC tracking, lumber firmness, and lean inventories
- Limited downside risk unless consumer demand meaningfully softens across discretionary categories
