Paint Supplier PPG Set to Raise Prices AGAIN Due to Inflation That is Not so Transitory
As the Federal Reserve continues to peddle its “transitory” inflation narrative, the list of companies set to raise prices in an economic environment that does not appear to be so “transitory” friendly continues to increase.
The latest company that announced plans to raise prices is paint supplier PPG Industries Inc. (NYSE: PPG), as it faces significant input price pressures, particularly for raw materials and logistics. Its CEO, Michael McGarry, recently told Bloomberg in an interview that the $40 billion company expects a significantly heightened inflationary economic environment in 2021, and as a result it has been forced to raise prices for the second time this year.
“What we’re obviously studying now is the need to be out with a third set of price increases,” McGarry explained. “Inflation is across-the-board, it’s obvious” and customers “don’t have a lot of good ways to counter the argument that we need to have price relief.” Given that PPG supplies products to a wide variety of industries including the auto manufacturing, construction, and consumer sectors across more than 70 countries, the Pittsburgh company has a broad oversight of the global economy.
According to McGarry, the rising global costs of oil, freight, and logistics, as well as growing scarcities of raw materials, are really beginning to suggest that inflation may not be so temporary after all. “I’m not seeing this as transitory,” McGarry said. “This work-from-home phenomenon is going to lead to additional wage inflation, because people are going to have the opportunities to figure out where they want to work.”
About 40% of PPG’s revenue is derived from the US, where the Federal Reserve continues to insist that any price pressures that do arise are only the result of the rapid economic reopening, and will subside once supply bottlenecks are resolved. The current CPI level rose by an annual 3.9% in May, marking the sharpest increase since 2008.
Information for this briefing was found via PPG and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
