As we wrap up the second quarter of 2021, we feel it is an appropriate time to share our view of the industry.
Drywall – ½” and 5/8” inventories have improved slightly. Specialty products are still on extended lead times from all manufacturers. We expect the specialty products to be in short supply well into 2022. Starch, silicone, wax, and vermiculite are all on an allocated basis. These items are all critical to the specialty gypsum products make up. We believe that we will potentially see a price increase quarterly into 2022. Specialty products will see a higher percentage increase than regular wallboard items.
Joint Compound – The joint compound products have seen improved availability in the last 60 days. Resin which is used in the manufacturing of pails is in short supply which may cause pails to be less available than boxes.
Steel Framing – Steel studs continue to have extended lead times. The anticipated improvement around mid‐year has not materialized. Steel pricing continues to surpass all time highs due to the mills inability to keep up with demand. We don’t foresee a substantial change in this until 2022.
Insulation – This product category has been hit the hardest of any product we distribute. In an effort to improve availability the manufacturers have all done SKU rationalization by eliminating some items. An example is the FSK faced insulation is virtually impossible to get meaning that the replacement is unfaced insulation and using rolls of FSK facing being field applied. Some breakdowns in various plants have been repaired and those facilities are back in production. Lead times are extremely long and will remain that way well into 2022. Pricing will continue to rise with 3‐4 increases expected annually.
Acoustical Ceilings – Mineral fiber ceilings are probably the best product category we distribute from an availability standpoint. Fiberglass ceilings do have an extended lead time in some cases. Grid products have experienced a similar pattern as mentioned above in the steel category. Both ceilings and grid will see continued moderate price increases through 2022.
EIFS – The winter storm that hit Texas has impacted this category with lead times that are longer than normal. Every month progress is being made and normal lead times should return by the end of 2021.
The business in general remains very strong. Housing starts were just reported at 1.7 million. That’s over 20% higher than 2020. The Gypsum Association has reported shipments thru June running at a pace of 28 billion square feet, this is a sizable increase over 2020 shipments. The Architectural Billing Index for the last two months has been 55 and 59 a strong indication of robust commercial activity. Freight issues continue to hinder our supply chain issues. Both trucking and rail are in an allocated position. We are working closely with our suppliers to creatively find ways to handle our incoming shipments. Thank you for your business. We will continue to strive to be your supplier of choice.
Respectfully,
Kirby Thompson
Senior Vice President of Sales and Marketing