E&S Manufacturers Boosted List Prices 4% The Past Year, AutoQuotes Data Show

One feature of FER‘s annual E&S market forecast, unveiled August 9 at the magazine’s President’s Preview E&S Market Forecast meeting, is detailed data on manufacturer list pricing trends from AutoQuotes Inc. The data this year shows equipment and supplies manufacturers were more aggressive with price increases in the year ended June 30, 2016 than in any 12-month period since the commodity-inflation driven years of 2006 to 2008. The data is based on list prices for more than 450,000 individual products from more than 530 manufacturers in the AutoQuotes database.

The average price increase for the 12 months from July 1, 2015 to June 30, 2016 was 3.98%. This compares with an average increase of 3.3% in 2014-2015 and 3.1% in 2013-2014. It was the largest average gain since manufacturers raised list prices 6.1% in 2007-2008.

Significantly more manufacturers raised prices in the first half of 2016 than in any year since 2008, AQ data shows. In the first two months of 2016, 235 manufacturers put through price increases. This compares with 203 manufacturers raising prices in the same two months in 2015, and 197 increasing prices in January and February 2014. At the depth of the recession in 2010, only 129 manufacturers dared to raise prices in the two-month period.

Data on the median increase—the mid-point of all the increases—show that manufacturers continue to employ a strategy of selective increases, raising prices aggressively on some products and little or not at all on others. The median increase 2015-2016 was a more restrained 2.55%, though this jumped from a 2% median increase in the prior 12-month period.

Among the product categories, the most aggressive list price increases were put through by makers of cooking equipment, with an average list price increase of 5.7%. This follows an average increase last year of 4.7%. Other categories with average increases exceeding the 3.98% overall average included ice machines at 4.4%, ventilation and non-coffee beverage equipment at 4.1%, and serving counters at 4%. Categories with the lowest average increases included coffee equipment with a 2.5% average list price bump, tabletop up 3.1%, and shelving and refrigeration which had 3.3% average gains.

FER Publisher Robin Ashton told attendees at the forecast meeting that he expects manufacturers to continue to be aggressive with increases in the coming year. “Most of these increases were put through before the prices of key materials including the carbon steels and stainless surged beginning in February.” Prices for key steel products have risen by as much as 40% this year and other key materials such as aluminum are also seeing price increases. “And manufacturers have other issues driving costs higher, especially the costs of refrigeration manufacturers complying with the new EPA and Department of Energy conflicting standards on energy efficiency and refrigerants.”

The complete FER E&S Market Forecast, which includes eight PowerPoint decks covering the general economy; U.S. and Canadian operator and international economic and operator trends; analysis of materials and commodities trends by Lisa Reisman, executive editor at MetalMiner; the manufacturer list price data from AutoQuotes; exclusive rankings of the Top 100 E&S manufacturers and dealers; and FER‘s hard-number forecasts out through 2020, is available for $1,595. For information e-mail Robin Ashton at rashton@fermag.com or call 847/910-5163.   “””