The last recession isn’t over yet, at least as far as the glass products are concerned.
Glass manufacturers, which shut 11 of 47 float-glass North American plants between 2007 and 2014, are now playing catch-up with demand from commercial builders whose business is robust. The Wall Street Journal reports that glass prices have risen by more than 30% over the past 18 months. Construction projects are being delayed because they can’t get the glass they need, especially for curtain wall, the metal-framed glass panels that have become popular design components for skyscrapers, airport terminals, hotels, and many other nonresidential buildings.
“The glass guys are dictating the timetables of a project to us,” Ralph Esposito, who oversees Lend Lease’s commercial construction in New York, tells the Journal. AvalonBay Communities have seen glass prices rise by 35% to 45% from 2013, and expects this supply-and-demand dilemma to persist through early 2016, says Scott Kinter, its Senior Vice President in Boston.
The Producer Price Index for the broad category “flat glass” in July 2015 stood at 126.6, up 5% from July 2014. The Bureau of Labor Statistics does not adjust this category for seasonality.
Shortages have become so severe that The Related Cos., one of the country’s biggest developers, recently joined forces with M. Cohen & Sons, a specialty metal manufacturer, to open its own glass factory, called New Hudson Façades, in Linwood, Pa. The Journal quotes Bruce Beal, Related’s president, as stating that his firm needs more than 3,000 glass panels for one skyscraper it’s building on Manhattan’s West Side alone.
Demand and price increases for glass aren’t confined to North America, either. Saint-Gobain, one of the world’s leading glass producers, reported a 9.8% increase in flat glass sales, to 2.633 billion Euros (US$2.9 billion), for the first half of 2015, during which the company’s operating income for that category rose 48.1% to 194 million Euros.
Perhaps ironically, last April the Journal also reported how several cities across the country were pulling back on their glass-recycling programs because glass had become too difficult and expensive to handle.
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