We were buying raw materials when we can get them. So we have to work that inventory down. If you look at our inventory balance actually in Q1, it’s still elevated relative to what our expectations are. So it’s really a matter of how we’re pulling those prior purchases through our inventory and into our cost of sales. We still have some, again, inventory to work down as we get into the peak season here in Q2. And we’ll see some more realized benefit once we are able to work through that inventory.Timothy Knavish Yeah, Jeff. To your basket question, our raw material basket is largely what it’s always been. But there are parts of that raw material basket that we’re still seeing year-over-year inflation in. Pigments, additives, extenders, inorganics, a number of items where we’re still seeing year-over-year increase.Operator Our next question comes from Vincent Andrews from Morgan Stanley.
Your line is open.Vincent Andrews Thank you. Thank you very much. I’m wondering if you could just help us better understand how March went. It sounds like, obviously, it was stronger than you expected particularly in the back half of the quarter, in which particular areas of your business that strength came in? And if there was any particular driving force for it and whether it’s continued into April so far to the extent you have data you can?Timothy Knavish Sure. Sure, Vincent. The parts of our business that were very strong as we move through March, I would say, our aerospace business, our auto business, particularly Europe auto. And as Vince alluded to earlier, our Comex business was stronger than we had expected as we saw more pull forward of the Easter campaign.Vincent Morales And just a reminder, when we said this in January, March is typically 40%, 50% of the quarter in terms of the size of the quarter, financially.
So again, when we have a strong March, it’s very helpful.Operator Our next question comes from Josh Spector from UBS. Your line is open.Josh Spector Yeah. Hi. Thanks for taking my question. So I just want to poke on the guidance again for the year. So if I think about some of the one-timers in 1Q, if I say, they’re maybe $0.20 in EPS seasonally adjust first half implies the year’s kind of at the midpoint of your guidance for the year about 710. No incremental benefit from raw materials.And where the areas where you talk about volume weakness, China housing industrial, maybe we’re talking about 20%, 25% of your sales, but you’re optimistic on auto OEM, refinish, aero, which more than offsets that. So I mean, is it a fair take to look at this and say, there’s really minimal benefit of raw materials in the second half, similar benefit of pricing and you’re just like pushing on where volumes are today or is that an entirely wrong way to look at it?Timothy Knavish Well, on our second half guide, first thing I’ll say is, it’s still 10% EPS growth Y-o-Y in an extremely challenging environment.
And so I just want to lead with that. And most of the concern for second half is more volume focused. We’re — continued slowdown, U.S. housing. We’ve got uncertainty on the general industrial side. And really, uncertainty on the pace of recovery of industrial/manufacturing in China. So those are really the key drivers to the second half.Vincent Morales Yeah. This is Vince. I’ll just add. Again, it’s still cloudy when we look at the economy. We do know that those countries are raising interest rates. There’s typically a delay between interest rate increases and consumer effect. We’re seeing that in different parts of our portfolio around the world. So we just remain somewhat cautious on the delayed effect on that interest rate increase environment.
As Tim mentioned, I’ll echo, we’re not sure about the pace of recovery in China. We do feel it’s going to be – our guide includes a moderate recovery continuing, elongated recovery. That’s beneficial from our perspective because we don’t see that creating more commodity inflation, but that – the pace of that recovery is still uncertain at this time.Operator Our next question comes from Aleksey Yefremov from KeyCorp (ph). Your line is open.Aleksey Yefremov Thanks and good morning, everyone. In architectural in the U.S., can you share any data or sentiment from Pro paint contractors? How is the backlog changing here?Timothy Knavish Yeah. Backlogs have remained surprisingly robust despite everything you see in the news and despite what’s happening in construction, driven by labor shortages primarily.
So the backlogs remain strong. And for our Pro business, the omnichannel of our Pro business was up almost 10% for the quarter. So we are seeing continued good activity in the Pro space in architectural in United States.Operator Our next question comes from Michael Sison from Wells Fargo. Your line is open.Michael Sison Hey, guys. Nice start to the year. Tim, just curious, in terms of the second half with the 10% EPS growth, I apologize I miss this, but what do you expect for volumes? What’s sort of the range of outcomes for the company? Is it down, flat, maybe even up on easy comps? Just curious. Thank you.John Bruno Hey, Mike. This is John. I’ll take that one. So as Tim pointed, there’s a few factors that we’re considering in the volumes forecast that’s in the guide.
I would say that it’s down slightly in our second half guidance, Mike, overall, based on all the feedback that Tim provided.Operator Our next question comes from Peter Clark from Societe Generale. Your line is open.Peter Clark Yes. Good morning, everyone. Just looking at your number one priority of getting your margin back and particularly on the Industrial Coatings because obviously, you were picking at over 18%. I know there’s been mix changes. You bought in lower margin acquisitions that you’re working on. But if I play with your full year guidance, you’re sort of inferring this margin recovering to about 14% ex-amortization. So you’re still 400 basis points of drift. I understand it’s challenging. Volumes are still not great. But is there anything structurally that stops you getting back to that sort of level in the next few years that you were achieving back in ’16 and ’17 level?
Thank you.Timothy Knavish Yeah. Thanks for the question. There’s nothing structurally preventing us from getting back to those levels. The big driver for us, I would say two things. Number one, volume. Volume is still down significantly from the time periods that you referenced. And so just the leverage from that. And then the other one is, operating efficiencies. All of the supply chain disruptions that we’ve had over the last couple of years, our manufacturing costs have not been at benchmark. And you heard that we did see some improvement in that in Q1 and we’re expecting further improvement as we move forward. So there’s nothing structurally preventing us from getting back to peak margins in that segment.Operator Our next question comes from Arun Viswanathan from RBC.
Your line is open.Arun Viswanathan Great. Thanks for taking my question. Just a couple of questions around margins. It looks like your margins were up at around 13% level for EBIT in the first quarter. Do you see continued growth there and what kind of volume growth would you expect to get that back into the mid-teens to high-teens level? Thanks.Timothy Knavish Well, we absolutely expect to see continued margin growth everyone, (ph) as I mentioned earlier, we’re confident that the next couple of quarters will show continued year-over-year margin improvement. The volume question, as John mentioned, we’re going to have volume challenges likely potentials for upside, but our base case is that it will be a tougher volume second half.Vincent Morales Yeah, Arun.
This is Vince. If you look at some of the nearer term levers we have, the rich mix we benefited from in Q1, we expect to continue against some of our key technology businesses, aerospace, automotive. Tim mentioned about the strength of the Mexican economy. We have leading positions in Mexico and several of our businesses, including Comex.And as Tim mentioned, we’re starting to see early signs of manufacturing optimization. Still a long – we still have a long way to go there, but that’s something internally we’re managing. And as I mentioned earlier, we have laser focus on our costs, especially with the volume outlook and the concern around consumer spending that I talked about earlier.Operator Our next question comes from Kevin McCarthy from VRP.
Your line is open.Kevin McCarthy Thanks. Good morning. A few questions on your auto OEM coatings business. What are you baking in for global builds in terms of your annual EPS guide? And would you also comment on any meaningful share shifts by region and how the EV penetration is playing out for PPG?Timothy Knavish Sure. Thanks, Kevin. Our base case on auto OEM for the year on builds is low-single digits with potential for upside depending what happens with a whole number of things around affordability in China. But our base case is low-single digits. We have not seen a huge amount of share shift. We did see some in China as we were executing our margin recovery strategy. We did lose some of the lower margin business, but what’s historically happened there, Kevin, is they ultimately come back for a number of reasons.And third part of your question was around EVs. What I could say on EVs is, we’re extremely pleased with our progress there.
