The National Association of Home Builders (NAHB) recently reported on the Producer Price Index (PPI) for August released by the U.S. Bureau of Labor Statistics. PPI numbers showed that gypsum prices declined slightly in July and August of this year, but don’t expect that trend to last. NAHB economists say that prices are currently at 92.6% of their peak housing boom levels, and announcements from at least three manufacturers indicate price hikes for 2014.
American Gypsum, National Gypsum, and CertainTeed are all raising prices by 20% for shipments starting Jan. 1, 2014. CertainTeed says a range of factors go into manufacturers’ pricing strategies, including increases in raw materials prices, and business and operating costs. “These include items such as freight and fuel costs for both inbound and outbound shipments to customers, various materials, maintenance and continuous improvement at our facilities, and third-party certifications that customers and building owners prefer to ensure they are getting sustainable, high-quality products,” the company told REMODELING.
The trend of annual price increases has been going on for at least the last two years. In late 2011, major wallboard manufacturers announced that they would eliminate the practice of job quotes, which traditionally provided pricing protection for customers, particularly on large projects, but limited the realization of price increases for manufacturers.