About 2019 Graco Pricing
Graco will be implementing list price changes effective Friday, February, 1, 2019. These adjustments reflect thorough assessments of products' high performance, market alternatives, a continued emphasis on the lowest cost of ownership and highest return on investment for end users.
Note: To receive 2018 pricing, orders must be placed and have cleared credit review by 12:00 Noon CST on Thursday, January, 31st, 2019.
- Exchange Rate: As a result of current currency trends, also effective on February 1, 2019, Graco will be increasing its exchange rate factor from 1.20 to 1.30
- Steel, Aluminum and Plastic: Looking ahead, the extent to which inflation from higher input costs continues to accelerate, will depend on whether trade tensions between the U.S. and its trading partners escalate further. For now, the commodity inflation forecast for steel, aluminum and plastic is expected to end the year at around 2.3%, but would note that the Trump administration’s trade policies present a near-term upside risk to our inflation forecast.
- Medical Costs: the medical cost growth rate is expected to be approximately the same as the prior year, resulting in an estimated 4.4% growth rate for 2019.
- Wage Inflation: In 2018, Graco's wage adjustments were in the range of 3% for factory and administrative functions. Similar wage adjustments are expected in 2019.
- Capital Investments made to Graco's factories raise the bar in the technical sophistication of final products we provide. On average these investments are in excess of $15 million on an annual basis. These investments reduce scrap, reduce maintenance costs, improve safety, increase quality, improve efficiency, increase capacity and improve service levels. The recent investment in Graco's new distribution center located in Rogers, MN is a prime example of our commitment to this approach.
- Supporting Older Technology: The current generation of Graco product is priced to competitive market levels. However, a portion the price increase is driven by the support offered on traditional legacy products and parts availability. While it's understand that when a line goes down or a product malfunctions, part availability is crucial to our mutual end customers. While Graco does not require end users to convert to the latest technology, there is cost pressure above inflation levels as manufacturing lot sizes significantly decline and inventory turns decrease. These costs are ultimately passed along.
Note: To receive 2018 pricing, orders must be placed and have cleared credit review by 12:00 Noon CST on Thursday, January, 31st, 2019.
