How Flat Glass Prices Have Trended Since the Recession
Compared to other major materials used in the construction industry, flat glass is rather mild in its price fluctuations over time. However, glass does have its ups and downs just like everything else.
Businesses throughout the supply chain have reported to us cost increases related to glass at various points over the last few years. Those in the glass fabrication business in particular have seen price upticks from the float suppliers and have had to pass those costs on down the line.
So with that said, let’s take a look at exactly how glass prices in the U.S. have been trending in recent years.
Setting the Stage
Here, I’m going to utilize the Producer Price Index (PPI) that is published by the U.S. Bureau of Labor Statistics every month.
The PPI is a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller.
The Producer Price Index is an extremely useful resource, but it can be a bit ambiguous. There are a variety of categories that encompass “flat glass.” Some overlap, and others include certain aspects of the industry but not others. Some simply aren’t relevant to us.
For the purpose of this analysis, I’ve settled on the category of “Flat Glass Manufacturing: Flat Glass (Float, Sheet, and Plate), made by Flat Glass Producers.” There are other indexes that encompass fabricators and other more distinct glass types, but I believe this one captures what we mean when we refer to flat glass prices generally. Further, the others generally track closely with the one I’m using here.
The flat glass PPI has gone through regular up and down shifts for decades. It spiked in the late-’80s, dipped in the early-’90s, spiked again even higher in the mid-’90s and then went back down before settling into a relatively steady rhythm from the late-’90s until around 2008.
Prices were at relative peak as the Great Recession took hold, and they saw a notable dip through the end of 2012. Since then, prices have ticked up.
Over the past half-decade, we’ve witnessed two series’ of steep price jumps that really stand out.
First, we saw an increase of 9.2 percent between the nine-month period of May 2015 to January 2016.
Things remained somewhat flat until the middle of 2017. Then, in late 2017 and early 2018, the primary float glass suppliers issued price increases of 5 to 10 percent. Having been made aware of these increases prior to the PPI being reported, we were anxious to see how the PPI would track and how accurately it would reflect the spike.
It turned out to be right on point, as we saw an increase of 7.7 percent between the six-month period of September 2017 to February 2018, which falls right in the middle of that 5- to 10-percent figure.
As a whole, 2018 was as “flat” as the name of the product would suggest. However, entering 2019, glass fabricators told us in our annual Industry Outlook survey that they collectively expected more price increases this year and that they would need to be passed along.
The flat glass PPI saw a bump heading into the beginning of 2019 but has again leveled out somewhat. It will be interesting to see how the full year 2019 turns out as it relates to flat glass prices, and we will be sure to revisit the topic for a look on how they continue to trend.
Nick St. Denis is the director of research at Key Media & Research