High gas prices trickle down

  • Associated Press
  • Monday, July 5, 2004 9:00pm
  • Business

What do carpet, tires and paint have in common?

They are just a few of the household items getting more expensive due to the high cost of oil and natural gas, important raw materials for these products and the source of energy needed to manufacture and ship them.

The price increases for such goods aren’t ubiquitous and are relatively small compared with the 30 percent rise in the price of gasoline from a year ago. Yet they illustrate how higher energy costs trickle through less obvious corners of the economy.

Builders Carpet Outlet of Ann Arbor, Mich., recently began selling brand-name nylon carpeting for about $1, or 4 percent, more per square yard, reflecting wholesale price increases imposed by major manufacturers such as Shaw Industries Inc.

The Goodyear Tire and Rubber Co. and Cooper Tire &Rubber Co. have each raised prices twice this year because synthetic rubber is made from chemicals derived from oil.

Paint manufacturer Sherwin Williams Co. of Cleveland, framed the impact of rising energy prices this way: For every 10 percent increase, the raw material costs for a gallon of paint go up more than 1 percent. That nudges up the retail price, spokesman Bob Wells said.

“We are starting to see more and more of this rippling downstream,” said Kevin Swift, chief economist for the American Chemistry Council, an Arlington, Va.-based trade group whose membership include the largest producers of plastics, coatings, fertilizer and other petroleum-based products.

The producer price index for finished goods – a measurement of wholesale prices – increased 0.8 percent in May, the biggest jump since March 2003, the Labor Department reported in June. And rising prices for a cross-section of consumer goods and services, from milk to lumber to document shipping, have raised concerns about creeping inflation.

In an effort to head off inflation, the Federal Reserve on Wednesday raised its key short-term interest 0.25 percentage point.

“Tom Brokaw has an item on every night about the cost of gasoline, but I think that’s the tip of the iceberg,” said Norman Davis, director of global energy purchases for International Paper Co., the world’s largest forest products company and a large consumer of fuel oil, used to run its plants. “I think people are so focused on the price of gasoline, that they don’t see the other stuff.”

Marshal Cohen, a senior retail analyst at NPD Group Inc., a market research company in Port Washington, N.Y., expects higher energy costs to reverberate through “the price of everything from socks to hats” by next fall.

Chemical maker DuPont last month raised the price of a resin used to make packaging and adhesives, a move spokeswoman Heide Rowan attributed to increased demand and higher prices for two raw materials: ethylene, derived from natural gas, and naphtha, derived from oil.

Gregory Reive, the sales manager at Builders Carpet Outlet, said the store raised prices for nylon-based carpeting in February and again in May. The carpet retailer has also introduced a $25 delivery charge to cover higher transportation costs.

“We don’t hide it either,” Reive said. “We let people know what’s going on.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

Lead climbers head up their respective routes at Vertical World North on Monday, Nov. 20, 2023, in Lynnwood, Washington. (Ryan Berry / The Herald)
Beginner’s ascent: A newcomer’s guide to indoor climbing

Indoor climbing gyms in and around Snohomish County offer thrills without winter chills.

Alexis Burroughs holds a bigleaf maple leaf while guiding her participants through sensory observation during a forest bathing session Sunday, Nov. 19, 2023, at Lord Hill Regional Park near Snohomish, Washington. (Ryan Berry / The Herald)
To restore human bond with nature, locals lead forest bathing sessions

A yoga instructor in Bothell and Adopt a Stream in Everett say the meditative practice evokes emotion, health benefits.

Instructor Gael Gebow checks her stopwatch while tracking her group’s exercises during her Boot Camp fitness class Monday, Nov. 13, 2023, at the YMCA in Everett, Washington. (Ryan Berry / The Herald)
YMCA fitness instructor challenges, empowers Everett residents

Gael Gebow has made inclusivity and healthy living her focus in 23 years at the YMCA.

A view of the Broadway construction site of Compass Health’s new mental health facility on Wednesday, Nov. 29, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Compass Health dedicates Everett block to housing and behavioral health services

The “state-of-the-art” project is set to total over $90M. The nonprofit has asked for public support.

More than 150 people attend a ribbon cutting event on Nov. 16, 2023 celebrating the completion of Innovation Hall at the University of Washington Bothell and Cascadia College campus. The building, which highlights STEM instruction and research, opens to students in January. Credit: Tara Brown Photography/UW Bothell
New science, math facility opens in January at UW Bothell

Innovation Hall is the first new building to be constructed at the Bothell university campus in 10 years.

Everett
Rairdon Auto Group acquires Pignataro VW in Everett

Everett VW dealership is the 12th for the Rairdon Group, which marks 30 years in business this year.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.