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Lixil Announces 10-20% Price Increase As Global Economy Enters Stagflation
On April 20, Lixil announced that it has decided to increase the suggested retail price for single-family residential roofing materials by 10 to 20 percent as of July 1, 2022, due to soaring raw material prices. The increase in the price of steel sheet used as a raw material and distribution costs will be passed on to product prices.
Since April, Lixil has implemented price increases of 2% to 39% for some of its bathroom and building products. This is Lixil’s second price increase for building materials so far this year. Since 2022, Moen, Gebreit, Hansgrohe, American Standard, Asahi, KVK, TOTO and many other bathroom companies have announced price increases.
For the recent phenomenon of rising prices of raw materials for sanitary products, industry analysts said that it is not just the price of raw materials for sanitary products, but almost all popular goods are increasing in price. This is a global phenomenon. It is reported that British furniture prices rose by 17%. Higher prices have led to a rise in the cost of living in the UK. Inflation is up to 7%, the highest level in 30 years. According to the latest Producer Price Index (PPI) report released by the U.S. Bureau of Labor Statistics, in March, the price of goods for residential construction rose 1.4%. This represents an 8 percent increase in construction material prices since the beginning of 2022. Construction material prices rose 20.4% year-over-year. Since the outbreak, construction material prices have risen by 33%.
Data from the Russian Ministry of Statistics show that in the first quarter of 2022, the construction price index rose by 4.6% year-on-year and by 19.3% compared to the same period in 2021. The main impact on the price increase in the construction sector was the continued rise in material prices. Compared to the previous quarter, construction material prices increased by 6.8%. This is a 27% increase compared to the first quarter of last year.
The current global bathroom raw material prices are still at high levels. The price of raw materials, including nickel, zinc and copper, accelerated due to the conflict between Russia and Ukraine. In March, nickel prices reached more than $100,000 per ton. In addition, the April 20 protests shut down about 20% of copper production in Peru, the world’s second-largest copper producer, adding to the global copper supply.
This is the negative impact of global inflation, the source said. The global economy has entered a period of stagflation. What is a period of stagflation? In economics, especially macroeconomics, refers to the economic phenomenon of economic stagnation, unemployment and inflation continue to rise at the same time. In layman’s terms, it means that prices are rising, but the economy is stagnant.
In the current global economic situation, how should bathroom companies respond? The person pointed out that the current Russia-Ukraine conflict uncertainty is too large. Energy and commodity prices are also rising across the board, while the country is also strictly enforced epidemic prevention and control. In the face of the complex economic environment, the fate of small and medium-sized enterprises is also unstable. They can’t predict the subsequent development trend of the economy, which is also an unconventional test for enterprises.