Raw material price increases spark inflationary spiral

Citation

(2011), "Raw material price increases spark inflationary spiral", Pigment & Resin Technology, Vol. 40 No. 6. https://doi.org/10.1108/prt.2011.12940faa.004

Raw material price increases spark inflationary spiral

Article Type: Industry news From: Pigment & Resin Technology, Volume 40, Issue 6

Coatings manufacturers are suffering from an “inflationary spiral” due to raw material price increases according to Tony Mash, Chief Executive Officer of the British Coatings Federation.

The findings from recently released government statistics on raw material price increases, highlight the key messages of similar statements also recently published by the BCF.

“Downstream customers should be in no doubt of the inflationary spiral from which the Coatings Manufacturers are suffering, and raw material suppliers should be well aware of the negative impact these increases are having on both the profitability and the growth potential of the Coatings Industry,” commented Mr Mash.

Figure 1 Producer prices index for raw materials and fuel purchased for paints, varnishes and similar coatings, printings inks and mastics ONS ref: KSYR (NSA)

Examples of the large price increases facing member companies are shown by the BCF’s latest, independently compiled Monthly Raw Material Prices Survey, covering some 30 paint manufacturers and including 50 key raw materials (Figure 1). For solvents, typical purchase prices were up by a quarter to a third on this time last year, with big increases also being seen for some resins, pigments, extenders and packaging products.

Many raw materials were at record high levels with recent increases coming on top of big rises in 2008 and 2009.

Mr Mash added: “Overall producer prices for the sector (using official statistics) were up 11 per cent in March compared with a year ago – the fourth month in a row that the index has reported a double digit increase”.