TRG | The Bottom Line – 4/29

Saint-Gobain last week announced a $118MM expansion of its CertainTeed Roofing shingle manufacturing facility in North Carolina. This move is significant in that we have found that manufacturers have been relatively reluctant to add capacity based on the fall-out from the Great Recession. Insulation manufacturers going into COVID have added capacity at existing plants, and St. Gobain’s announcement of an expansion of its roofing capacity is a more significant vote of confidence on the U.S. housing outlook. According to the release, the five-year expansion investment will support the company’s growing customer base, specifically in the southeastern U.S. By our estimates, the capacity addition could contribute an additional 2-4% to total industry volumes/capacity.