Wallboard Prices are Headed Up and Job Quotes Are Gone!

Many thanks to Roger Larson of REW who provided this information and suggested that we publish it to inform everyone of what’s happening in the wallboard industry.

From the Thompson Research Group they report …”In “normal” times, job quotes made sense for larger commercial jobs, but over the past 4-5 years, this practice has been abused to the point of effectively eroding any price increase effort and has put downward pressure on market prices. Eliminating job quotes shifts the pricing risk to distributors and away from manufacturers. Anywhere from 30%-70% of wallboard pricing is protected by job quotes in the current market, according to TRG contacts. Price protection limits the effectiveness of price increases. In the absence of meaningful

volume growth over the next couple of years, eliminating job quotes effectively shores up earnings through more disciplined industry pricing.

Anyone who has had any experience covering the wallboard industry knows it is notoriously profligate with pricing. Eliminating job quotes is a step in the right direction for wallboard industry pricing.”

Furthermore, as National Gypsum points out in the attached letter to customers…“The practice of job quotes is broken and counterproductive to meaningful and consistent price management needed to support profitability.”

National Gypsum, American Gypsum, and Lafarge have announced a price increase of 35% on all wallboard products effective 1/1/12.  While USG’s policy is to announce price increases only 30 days in advance, so the company will announce its “new price schedule” on 12/1/11.  One should expect a similar price increase of 35% by USG.

For more information please read the two attachments.

TRG 3rd Quarter Notes  
Attachment 2