Question-and-Answer Session
Thank you. [Operator Instructions]. Our first question comes from Claudia Hueston from J.P. Morgan. Please proceed with your question.
Claudia Shank Hueston - J.P. Morgan
Thanks very much. Good morning.
Harris E. DeLoach, Jr. - Chairman, President and Chief Executive Officer
Good morning, how are you.
Charles J. Hupfer - Senior Vice President, Chief Financial Officer and Corporate Secretary
How are you?
Claudia Shank Hueston - J.P. Morgan
I was just hoping if you talk for a minute about the tubes and cores business and just the volume situation there. You have volume trend deteriorated at all since last quarter, are you seeing any difference in trends? It seems like your presence is quite strong in Europe but how are volumes looking if there's sense of an increased concern around the European economy recently?
Harris E. DeLoach, Jr. - Chairman, President and Chief Executive Officer
Claudia as I hear what you say, you really raised two questions and we have not seen any deterioration in the tube and core volume over the last quarter in general and then as there's specifically North America. The European economy we've probably have seen no deterioration there either we have seen as we said in the second quarter some softening down around Italy and Spain and that continues but we haven't seen much change in volumes in the tube and core quarter-over-quarter.
Claudia Shank Hueston - J.P. Morgan
Okay, thanks. And then in terms of the pricing in that business or the margin improvement in that business. Is it mostly pricing in Europe that's driving it higher or are there still cost reduction efforts that are going on?
Harris E. DeLoach, Jr. - Chairman, President and Chief Executive Officer
Well, I would say in Europe it's primarily the pricing that is driven it higher. There are certain productivity gains that we're having in Europe as a result of the carbon consolidation efforts that we made a couple of years ago. The plants, the operations still continue to improve, and I expect that to continue. And North American, I'll go back to that for a second; she didn't answer it, we... Charlie said we have pricing in the market that we continue to grow and to recover. The big issue in that North American integrated system in the quarter, if you really boil down, it was the recovery of energy cost. And that was really the genesis of the aggressive or the announcement we made in late June to recover all the energy surcharge that we put in place in that business.
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