Toilet Paper Production is the Bright Spot in the Economy


Of the 18 manufacturing categories tracked by the ISM, only two were in positive territory.

Inquiring minds are diving into the latest ISM Manufacturing Report in search of bright spots. There were two.

Up: Paper Products; and Food, Beverage & Tobacco Products.

Down: Printing & Related Support Activities; Furniture & Related Products; Transportation Equipment; Textile Mills; Fabricated Metal Products; Nonmetallic Mineral Products; Machinery; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Wood Products; Miscellaneous Manufacturing; Computer & Electronic Products; Primary Metals; and Chemical Products.

Select Comments

  1. “Production stopped, other than to make hand sanitizer for those in need.” (Chemical Products)
  2. “The food processing B2B space remains steady. We are weathering the storm. There is a fortunate increased need for packaged foods. Softening is showing through in some products that find their way into food service and lodging.” (Food, Beverage & Tobacco Products)
  3. “Our packaging business is starting to see signs of a slowdown in May after two strong months into COVID-19.” (Paper Products)

Comment #3 implies the shortage of paper products, including toilet paper and Kleenex may be over.

The lead image is from the Grist article How coronavirus creates empty shelves and toilet paper shortages.

ISM April 2020 Numbers 

ISM 2020-05

ISM Synopsis

  1. The PMI® indicates a level of manufacturing-sector contraction not seen since April 2009, with a strongly negative trajectory.
  2. Demand contracted heavily, with the (1) New Orders Index contracting at a very strong level, again pushed by new export order contraction, (2) Customers’ Inventories Index approaching a level that is considered a negative for future production, and (3) Backlog of Orders Index strongly contracting, in spite of a lack of production during the period.
  3. Consumption (measured by the Production and Employment indexes) contributed negatively (a combined 36.5-percentage point decrease) to the PMI® calculation, with activity dramatically contracting due to plant closures and lack of demand. Inputs — expressed as supplier deliveries, inventories and imports — strengthened again due to supplier delivery issues that were partially offset by continuing imports sluggishness.
  4. The delivery issues were the result of disruptions in domestic and global supply chains, driven primarily by supplier plant shutdowns. 
  5. Prices continued to contract (and at a faster rate in April), supporting a negative outlook.

Price Deflation Coming Up

Point #5 above points to price deflation.

However, many people are concerned that all the Fed printing is sure to lead to high inflation.

I'm not one of them.

Bubbles are Inherently Deflationary

When asset bubbles burst, debt deflation results accompanied with a bit of price deflation as well.

It's the debt deflation that really matters.  

For discussion, please see Inflation or Deflation? Collapse in Demand Trumps Supply Shocks.

Also note Hyperinflationists Come Out of the Woodwork Again.

Mike "Mish" Shedlock 

Comments (19)
No. 1-13

"Toilet paper production up".
And, we are using a lot less of it as our Toto toilet with washlet was installed in January.
My guesstimate is that we have reduced consumption by over 60%.
I should have installed a washlet years ago. Amazing improvement in the pooping experience.


Perhaps they should get ahead of the curve and begin ramping up facial tissue production. I anticipate a shortage coming in November when Biden self destructs and Trump wins again. The Democrats will be crying endlessly for at least a year or more......


I would guess that the increase in TP production is selective. Charmin and Northern are no doubt making all they can, while commercial TP makers like Georgia-Pacific probably are trying to figure out what to do with all the unsold inventory they have. I've been expecting to start seeing commercial TP appearing in supermarkets. Maybe it already has.. I haven't been to the store in weeks.


Long term, there's little reason to believe any sanitary paper will be in shortage at the retail level. Food service was such an insanely heavy user of the stuff, and that demand has largely dried up now, and will likely stay subdued for an extended period.

Wonder if anyone is looking into making facemasks from cellulose. For medical users, who need it to last and perform reliably for hours, plastic fibers may be more reliable. But for typical retail use, like going into the grocery store, a properly made paper mask just may work just as well, for the less than 1 hour it is called into service. For retail end users, the most important thing is that it is cheap enough to not ever having to bother with reuse. A typical N95 taken on and off over and over because throwing it away every time you fill gas or take an elevator is too expensive, may very well add up to less overall efficiency than a throwaway paper mask for those uses.


The TP shortage was partly caused by mismatches: home vs. commercial space. As people moved to remote work, the home consumption soared.
The same can be applied to food production, restaurant deliveries dwindled.

Tony Bennett
Tony Bennett

"Prices continued to contract (and at a faster rate in April), supporting a negative outlook."


Trend will continue for foreseeable future.

Anyone thinking otherwise needs to do some 'splaining.


No shit.


Given the drive to open up, where are the abundant supplies of masks, gloves, cleaning and sanitizing products? Add that to the lack of tests, opening will just lead to more closures.

Why is the opening-up being sabotaged?

Why is the greatest generation being led into the crematories, after having shut them down in the last war we ever won?


The surge in toilet paper purchase is temporary because of stockpiling. People are not Consuming more toilet paper


Toilet paper is old news. What's hot right now is Plexiglas! Most every supermarket and small local store in CA is now sporting these huge Plexiglas barriers surrounding the cashier station(s). Costco has even installed them in the bathrooms to separate people as they wash their hands.

Hansa Junchun
Hansa Junchun

Mish, inflation does not fit all parts of the economy the same; Milton Friedman found this out the hard way when he advised saving the British pound from inflation by raising BoE rates sky high, only to watch in shock as the pound plummeted at the checkout counters. We will soon be in a scenario where debt deflation crushes all capital creation but Fed printing forces consumer prices into the stratosphere. Both will happen contrary to one another for the simple reason that both are totally artificial creations of bad central bank policy. Macroeconomists will be scratching their heads over this one for the next century, mark my words!


So if the paper factories are busy with TP, does that mean the newspaper's production costs just went up? Another blow to newspapers when they need it least?

Global Economics