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US companies warn Ida latest supply chain hit

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Outages in Lousiana's petrochemical industry due to Hurricane Ida have exacerbated a raw material crunch./AFP
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Sep 09, 2021 - 06:45 AM

NEW YORK — Outages from Hurricane Ida are exacerbating shortages of raw materials, prompting fresh warnings Wednesday from large US companies saying supply chain problems will hinder sales.

Paint company Sherwin-Williams cited Hurricane Ida when cutting its third-quarter sales forecast after previously projecting a recovery from the supply woes amid the Covid-19 pandemic.

“We continue to see strong demand,” Chief Executive John Morikis said in the statement. “However, persistent and industry-wide raw material availability issues have not improved as anticipated, impacting our ability to fully meet the strong demand.”

Morikis said the company would impose a “four percent surcharge” in its Americas division to offset higher raw materials, transportation and labor costs.

The Sherwin-Williams statement echoed Tuesday’s warning from paint and coatings company PPG, which cut its third-quarter forecast, warning sales would come in between $225 million and $275 million lower than previously expected.

PPG cited “increasing disruptions in commodity supplies,” and said the company was continuing to “assess the full impact of Hurricane Ida, which could include additional supply chain effects.”

The statements show how the storm — which led to widespread outages at key Gulf Coast petrochemical plants — has added to the pressures on supply chains already hit by the pandemic disruptions, prompting higher prices.

PPG also said it had implemented price increases to offset elevated costs and “is seeking further increases.”

Meanwhile, homebuilder PulteGroup on Wednesday warned that supply chain problems and shortages of key building products would slow some closings.

“Despite the extraordinary efforts of our trade partners, the supply chain issues that have plagued the industry throughout the pandemic have increased during the second half of the year,” said PulteGroup Chief Executive Ryan Marshall.

“We continue to work closely with our suppliers, but shortages for a variety of building products, combined with increased production volumes across the homebuilding industry, are directly impacting our ability to get homes closed to our level of quality over the remainder of 2021.”

Low mortgage rates has spurred demand for homes throughout the pandemic, pushing prices higher and draining supply, which also has been impacted by a shortage of construction workers.

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