Current situation:
- Producer prices for HDPE pipe were up .2% M/M (down .3% last month) and were down 3.0% Y/Y (down 3.8% Y/Y last month). Plastic pipe fittings and unions were flat M/M (down .4% last month) and were up 2.9% Y/Y (up 2.7% last month).
A strong consumer environment, mortgage rates remaining favorable for new construction and the Fed dropping rates steady will help. But, the impact of COVID-19 is so fresh and new, we really don’t know what the layoff picture will begin to look like. That would affect new starts. Construction firms are also being told to shut down construction in many areas, which will impact starts in the near term.
Oil prices have been impacted heavily by dropping demand from COVID-19 and an increase in supply as OPEC and non-OPEC nations can’t agree to production cuts. Prices are now 64.6% lower Y/Y at just $20.85 a barrel for WTI. As a result, U.S. land-based oil rig counts are down 230 units compared to last year through 3/13/2020; oil rigs are down 150, gas is down 86. North American rig counts are down 220 rigs
