TRG | The Bottom Line – 7/8

Inflation remains a hot topic, continuing to dominate headlines. This week TRG published our Q2’22 Building Product Survey, a research piece that gives a look into volume and pricing trends in the steel stud, wallboard, insulation, ceiling, and flooring industries. Key focus areas were on inventories and supply chain, which ultimately impact pricing trends across the board. Supply chain is generally “no better, no worse” based on feedback from industry contacts. Issues now are focused on less obvious (but critical) items. Energy costs and interest rates are also higher, creating a strain on the system, and inventory optics remain less clear. That said, it is clear we are already seeing easing in certain commodity costs that spiked in 2021, including steel and lumber products. Hot-rolled coil steel has dropped 50%+ from highs but is still up 100%+ from COVID lows. We don’t necessarily see steel costs retreating to 2020 lows, and more likely, we are closer to more reasonable levels that reflect “real” demand.