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Armstrong CEO: ‘Modest Recovery’ In Housing

All signs point to a moderate housing rebound underway, Armstrong World Industries CEO Matt Espe said Thursday.

“Obviously, what we’re seeing here is somewhat of a broad-based, modest recovery,” he said on “Fast Money.”

Espe said that industry figures showed the single-family housing market growing at about a 10 percent rate and multi-family housing near 20 percent.

The maker of flooring and ceilings, based in Lancaster, Pa., generally sees better margins in the single-family space when compared to apartment buildings.

Armstrong stock closed at $47.13, up 1 percent.

During the housing market peak, Espe said revenues came equally from commercial and residential markets, but now skewed toward the latter by 60 percent.

“The best leading indicator is the forecast around new housing starts. That’s a good proxy,” Espe said, noting that floors and ceilings are the last components of a house to be installed. “You know, general macro, economic trends like unemployment, consumer confidence, absolutely drives that.”

Twenty percent of Armstrong’s business is in Europe, Russia and the Middle East.

Rising oil prices have increased pricing pressures, too.

“We saw about $65 million of inflation last year,” Espe said. “We’re looking at about half that. We will see some inflation this year, but about half we’re able to cover that in price, so we’re getting price over inflation in both the ceiling and the flooring business.”


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