Inflation in softwood slows (a bit), but others pick up the slack

Like a summer heat wave that just won't break, inflation in construction and maintenance supplies shows little sign of abating. Today price inflation is accelerating in 16 of 21 industries from the PLANT ENGINEERING construction and maintenance supplies index. Three months ago that number was 17 because softwood plywood was still speeding out of control.


Like a summer heat wave that just won't break, inflation in construction and maintenance supplies shows little sign of abating. Today price inflation is accelerating in 16 of 21 industries from the PLANT ENGINEERING construction and maintenance supplies index. Three months ago that number was 17 because softwood plywood was still speeding out of control. The latest report shows softwood plywood tags accelerated "only" 43.5% in the 12-month period ending May 2005, slowing from the 48.7% inflation rate recorded three months earlier.

Excluding pesky softwood, the most troublesome price hikes came from three industries. Producers of steel pipes & tubes raised their average product prices 33.2% in the 12 months ending May 2005, up from 17.4% three months earlier. Over the same time period, makers of noncurrent-carrying wiring devices pushed tags up 21.6% after an 11.3% hike three months prior. Finally, sawmill operators raised their average prices 15.3% on the heels of a 10.9% price hike.

The good news for factory maintenance budgets: all four of the top inflationary industries are experiencing stable or falling underlying cost trends. That's why these industries are sporting a B grade in our margins column. So room for negotiation is starting to emerge.

In fact, if you argue that manufacturing margins should return to average levels held over the past five years, then softwood plywood tags have room to fall 11.3%. Likewise, prices for steel pipe and tubes can drop 8.2%, noncurrent-carrying wiring devices can fall 6.1%, and sawmill products can dip 2.7%. Beware, however, for if suppliers in these four industries want margins to return to year-ago levels, then they can make a case for respective price hikes of 35.1%, 2.6%, 10.8%, and 4.7%.

Price/cost/demand roundup

Construction & maintenance supplies Average Product Prices (1) % Change During 12 Months Ending Direct Manufacturing Costs (2) and Margins Grade Growth in U.S. End Markets (3) % Change During 12 Months Ending
Industry 3 months ago Current month Costs are Grade 3 months ago Current month
(1) Average product price changes are calculated from the producer price index for each 6-digit NAICS (North American Industry Classification System) industry from the U.S. Bureau of Labor Statistics.
(2) Analyses of each industry's direct manufacturing cost changes are from Thinking Cap Solutions Inc.'s proprietary Industry Cost Escalation (ICE) model. The "grade" indicates that recent price/cost changes have produced record high (A+) margins to average margins (C) to record low (F-) margins for the average producer in an industry. Grades of A to A+ mean plant engineers may be able to strike a better bargain with suppliers and better control plant costs.
(3) Growth in U.S. end markets data are from the ICE model and are estimates of output for the domestic end markets which purchase a given industry's products.
All data prepared and presented by Thinking Cap Solutions Inc., Port Angeles, WA (email:
Sawmill products10.9415.30fallingB3.992.99
Wood windows & doors1.362.21fallingD3.503.94
Other millwork (excl. windows & doors)7.7310.92fallingC3.954.45
Hardwood plywood-0.681.56fallingB3.733.51
Softwood plywood48.6943.47fallingB3.733.51
Shelving & fixtures3.777.18fallingA2.792.98
Flat glass-1.23-1.88stableD8.908.58
Sewer pipe & other structural clay products1.891.53stableC1.683.44
Gypsum products5.9810.82stableA3.664.22
Fiberglass & other mineral wool1.224.54stableA5.685.59
Iron & steel pipes & tubes17.3833.22stableB6.945.75
Metal & plastic plumbing fixture fittings1.131.70stableF4.974.97
Metal windows & doors1.552.38stableF3.574.11
Sheet metal work3.676.95fallingF7.727.68
HVAC equipment0.170.65stableD3.283.27
Current-carrying wiring devices0.020.89stableF6.896.39
Noncurrent-carrying wiring devices11.3121.62stableB6.896.39
Nonresidential electric lighting fixtures0.450.09stableD2.323.17

The Top Plant program honors outstanding manufacturing facilities in North America. View the 2017 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
SCCR, 2018 Maintenance study, and VFDs in a washdown environment.
Welding ergonomics, 2017 Salary Survey, and surge protection
2017 Top Plant winner, Best practices, Plant Engineering at 70, Top 10 stories of 2017
Product of the Year winners, Pattern recognition, Engineering analytics, Revitalize older pump installations
Control room technology innovation; Practical approaches to corrosion protection; Pipeline regulator revises quality programs
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Setting internal automation standards
Knowing how and when to use parallel generators
PID controllers, Solar-powered SCADA, Using 80 GHz radar sensors

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
This digital report explains how plant engineers and subject matter experts (SME) need support for time series data and its many challenges.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me