Volatile Glass Prices Might Continue to Affect Industry in New Year
December 23, 2011

By Sahely Mukerji, smukerji@glass.com

As construction materials prices inched down 0.1 percent in November, flat glass prices went down 0.3 percent from October to November, according to the November Producer Price Index, released on December 15. However, the unadjusted percent change for flat glass prices from November 2010 to November 2011 was up 1.8.

There was no change in glass and glassware import prices from October to November, however, those prices went up 3.3 percent from November 2010 to November 2011, according to the November U.S. Import and Export Price Indexes, released on December 14. Export prices for glass and glassware went down 0.1 percent from October to November, but went up 0.7 percent from November 2010 to November 2011.

According to an analysis of PPI figures by the officials of the Associated General Contractors (AGC) of America, despite the slight down trend in November, the construction materials prices climbed 6.2 percent from a year earlier, outstripping the increase in contractors' bid prices for finished buildings. AGC officials warned that the cost squeeze on contractors, combined with declining public sector investments in construction, might drive many contractors out of business, according to a December 15 AGC release.

"Price increases have moderated or even reversed direction at the moment for essential construction materials but prices are likely to increase in the next few weeks," says Ken Simonson, the AGC's chief economist, in the release. "Meanwhile, federal construction funding has slowed sharply, and some may be cut off completely by next week, leaving contractors in desperate shape."

Prices are likely to be as volatile next year, Simonson says.

The glass and metal industry continued to hurt in the face of rising prices and a down economy. Just this week, AGC Flat Glass of Alpharetta, Ga., began laying off employees at its Blue Ridge Plant; New World West of Brea, Calif., filed for bankruptcy; and Intigral of Cleveland, Ohio, closed one of its plants for seasonal shutdown on December 16.

"We anticipate it will open back in March," says Shannon Carlin, vice president of sales of Intigral. "We do this every year in our Toledo and Youngstown plants, usually, just for the holidays. The industry is down, so we're shutting it down for a longer period of time this year, until the volume comes back. A couple of employees will continue to stay on board."

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