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Higher Tariffs Affect US Building Product Margins, Leverage
The increase in tariffs on Chinese imports could negatively affect margins for US building product manufacturers by up to 200bps, absent pricing and other mitigating actions, according to Fitch Ratings. The ability to offset the incremental cost with additional pricing will depend in part on the product category, distribution channel and strength of the US housing market. Higher leverage is possible for some issuers, absent debt reduction or benefits from other mitigating actions including supply chain adjustments. Rising input costs caused by commodity and transportation price inflation drove a median Fitch-measured ... (full story)