Paint supplier PPG knows that inflation isn't just "transitory".
In fact, the company, who supplies to major manufacturers like Ford and Boeing, is raising the prices of its paint and coatings solely as a result of "inflation in raw material and logistics costs", according to a new Bloomberg article.
Chief Executive Officer Michael McGarry made sure PPG was one of the first to raise prices earlier this year, as the company anticipated an inflationary environment. Now, they're raising prices again.
McGarry said: “What we’re obviously studying now is the need to be out with a third set of price increases. 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.”
And it isn't like PPG is just a localized business experiencing a one-off in costs: the company is in more than 70 countries and is still "feeling the pinch from the prices of oil, freight and distribution going up and raw materials running scarce".
“I’m not seeing this as transitory. 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,” McGarry continued.
McGarry says the trend is visible in the U.S. and he expects to see it "spread to other regions".
Meanwhile, one man's finished product is another man's raw material: the price of paint and coatings going up will add to raw material supply costs for companies like Stellantis, who is one of PPG's biggest customers. This comes as other raw materials for automakers, like copper, aluminum and steel, are all rising in price as well.
PPG generates about 40% of its revenue in the U.S., Bloomberg notes. It has boosted pricing for 17 consecutive quarters and McGarry says the steak should continue through the rest of this year.