In a recent interview on business news TV channel CNBC, PPG CEO Michael McGarry talked about how inflation had impacted the company and how the company plans to address the situation.
McGarry began by revealing that PPG had suffered 25 per cent cost inflation in the US during the first quarter. CNBC Squawk Box co-host Becky Quick asked if that was overall cost inflation and not just higher raw materials, to which McGarry explained that it was overall across the business.
“Energy, labour, transportation, warehousing; there’s not a lot of places that we’re not seeing inflation right now,” McGarry said.
The PPG CEO said the rising costs were leading to price increases for the company’s products, adding that customers were generally experiencing the same cost inflation impact across the industries they operate in. These include automotive aftermarket, automotive OEM and aerospace.
McGarry noted that inflation may be peaking.
“[We] certainly see it starting to level off. Not today, but we’re seeing the increases are coming fewer. We’ve had less force majeures in the products that we buy. We’ve seen it slow down in China, we’ve seen it slow down in Europe, so we’re optimistic that if we’re not at a peak, we’re very close to it.”
However, he clarified that the company is still in a favourable position.
“For us, we have a lot of underlying, good demand. Our automotive business is very strong, [there is a] strong backlog in our aerospace business, and in our aftermarket automotive business [there is] also [a] very strong backlog, so we still see raw material inflation, but it’s moderating, but we still see underlying good demand.”