Is Drywall Maker USG The Canary In The Coal Mine
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Old time miners used to take canaries down into their mineshafts to let them know if the ventilation was bad. Today, the canary very well could be the sales of USG, a major sheetrock provider. The company is not well diversified so their fortunes will be tied directly to new home construction and the price of sheetrock. They are locked into a product that is both demand and price sensitive. So as demand drops, so does the price and they take a double hit.
In an outstanding article at the International Herald Tribune, USG’s journey from the peak of the market to now the depths is well documented. Worth a read in my book if you are interested in new construction.
USG is in the midst of a typically steep decline, tracking the fortunes of its home builder clientele. If the last two cycles are any guide, USG’s price for 1,000 square feet of drywall could plummet from its high of $188.37 during last year’s third quarter to about $95, even as the volume of drywall USG and its competitors sell also declines steeply.
USG said its drywall price during the second quarter averaged $141.97, a 25 percent drop from the peak. Net income plunged 68 percent as a result to $56 million from $176 million a year earlier.
“Business is tough,” said William Foote, chairman and chief executive of USG. “The housing recession is entering the second year of what is likely to be a multiyear downturn.” via International Herald Tribune.
It probably is a really good time to buy real estate - monthly payments are about equal to market rents ...
The part about the inventory is right on but in my area they are mostly low end and beat up ...
I worked for this man, he is a great con man and has done this in more than States then ...
You're right. If you come from Central Jersey (as the Boss and I do), you go to Florida at some ...
Maybe it was kryptonite...
ECONOMIC REPORT
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By Mike ...
I couldn't agree more.
The newspaper has always "stuck" it to the real estate agent with rates that were much higher ...
By the way, homeowners trying to get short sale approval should be aware that lenders are comparing the initial loan ...
Ouch! Thankfully I haven't come across anything like that yet. We normally don't have situations like that in ...
well, the guy was here illegally.
serves him right. 
BY USING FIRST CLAIM INSURANCE ADJUSTERS YOU WILL HAVE THE ABILITY TO LOOK AT YOUR INSURANCE SETTLEMENT AND REALIZE FIRST ...
Comment by Edmonton Real Estate on 7 August 2007:
That is a tough business to be in. Does drywall have a shelf life? The would be better off to produce a a steady rate and keep inventories on hand.
Comment by Sock Puppet on 7 August 2007:
Is there a “wetwall”?
-Athol
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Comment by Tom on 7 August 2007:
The wetwall is where the tears of the unprepared real estate agents hang out. The real estate version of the wailing wall.