Tradelink


04 April 2022 | Inflationary Market Conditions

Thank you for your unwavering support during an extended challenging period where together we have navigated COVID-19, and more recently the floods in Queensland and New South Wales.

You would be aware that the global recovery from the pandemic is generating supply-constrained price pressures that are already having a significant impact on construction, including key inputs for the building and plumbing industries.Notably the Producer Price Index is growing at over 15%, twice the rate of the Consumer Price Index (CPI).


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Source: World Bank, Macrobond, Bain MTG Analysis 2022


Coupled with the raw material shortages, global freight and fuel costs are continuing to rise due to continuing shut-downs, labour shortages, port congestion and geopolitical tensions.The shortfall in ships and containers is contributing a 7-12% rise in the cost of goods.


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These compounding market factors will necessitate price increases across our product offer, and there is potential for multiple upward movements in the coming months as we jointly manage this period of uncertainty.

We wish to provide this forward communication on the scale of incoming inflationary pressure as Tradelink will initiate price increases aligned with those levied by manufacturers and vendors. The outlook for increases in key product categories over the next 3 to 6 months is outlined below.


Category

Estimated Increase

DWV, Stormwater, PE, HDPE

12 - 20%

Copper & Brassware

5 - 10%

Sanitaryware (Basins & Toilets)

7 - 12%

Hot Water Systems

5 - 7%

Tapware

7 - 10%


While input costs remain fluid, Tradelink is taking a reasonable step to reset the contract price term offered to our customers to 6 months.This measure is required due to the severity of the cost headwinds and will be reviewed when the steep inflationary environment subdues.

Tradelink and our parent company, Fletcher Building remain committed to working with manufacturers, vendors, and freight carriers to mitigate supply risk and minimise price impact where possible.We will strive to remain competitive; as key input costs reduce and supply constraints ease, we will evaluate and adjust pricing accordingly.


Keeping You Informed of Price Movement

Transparency of these price increases is critical for management of your business.We will provide regular communication of price movement via email.For your reference, our new B2B trade portal launching today accurately displays your “live” price at any time.You can contact your local branch or Account Manager for instructions on how to link your trade account to the portal.

We are grateful for your continued partnership with Tradelink. Should you have any queries, please do not hesitate to contact your relevant Account Manager or local Branch Manager.