PPI Inflation Building in Industrial Pipeline, May Trickle into End Markets

Research evidence excerpt

PPI Inflation Building in Industrial Pipeline, May Trickle into End Markets

USA | Multi-Industrials EquityJuneResearch11, 2026

Exhibit 1 - Round Up of Relevant May PPIPPI Inflation Building in Industrial Pipeline, May

Metrics vs. April

April 2026 May 2026Trickle into End Markets End Market Category PPI y/y PPI y/y

Electronic Components and Accessories 28% 27%

Truck Transportation of Freight 14% 17%

Fluid Power Equipment 17% 16%May PPI points to inflation building upstream, with unprocessed goods up Switchgear, Switchboard, Industrial Controls Equipment 12% 11%

22% y/y. To date, this has not translated into broad-based end-market inflation TransportationMetal Valves, Exceptand WarehousingFluid Power Services 9%9% 10%8%

Headline PPI 6% 7%

Internal Combustion Engines 5% 5%across our coverage. Heavy machinery end markets (construction, ag, mining) Pumps, Compressors, and Equipment 5% 4%

remain in the LSD/MSD range, though pressures could begin to rise in coming Warehousing,Construction MachineryStorage, andandRelatedEquipmentServices 4%4% 4%4%

Air Conditioning and Refrigeration Equipment 4% 3%

Motors, Generators, Motor Generator Sets 3% 3%months. Electrical components is the exception, running in the high-20% range, Agricultural Machinery and Equipment 2% 2%

reflecting grid and data center demand and ongoing shortages. . OilMiningFieldMachineryand Gas Fieldand EquipmentMachinery 1%1% 1%1%

Source: FRED

Bottom Line. May PPI confirms strong April input cost trends in industrials and with inflation signs

building upstream. Unprocessed raw materials rose 22% y/y in May, with intermediate materials

up 13% and services up 5%. This compares to L-MSD increases for industrial finished goods and

suggests inflation is likely building in the pipeline across our coverage.