Todd Schneider: Yes, I’ll start, and Mike wants to chime in as well. Yes, so what we’re seeing from an input cost standpoint, labor is still higher than historical. But to Mike’s point earlier, we’re finding ways to improve operating margin in that environment still. And part of it is because productivity is quite attractive. And we’re trying to position our employee partners so that they can be more successful in the marketplace, which is good for them and it’s good for ourselves. And obviously, with that retention levels of our employee partners being much back — very close to historical levels. That’s good for our customers as well. Other input costs, you saw where energy was down year over prior. That is really a Q1 subject because if you recall last year, the price at the pump was very high.
And so we got a little bit of a tailwind there. But we think that will be pretty muted through the balance of the fiscal year. And then last, material costs. Our global supply chain team is doing one heck of a job in trying to make sure that we’re well positioned to have very competitive prices and access to all that product. And we’ve spoken in the past about how a very small percentage of our products are single sourced. So that positions us well as far as having access to product, but also being giving them at very competitive rates.
Joshua Chan: And I guess for my follow-up, could you talk about what your CapEx expectations are this year and kind of the types of projects that you’re investing in?
Michael Hansen: Sure. We did see a little bit of an increase in CapEx in Q1. We are — as we’ve talked, we are in the midst of implementing SAP for our Fire Protection business and that adds a little bit of CapEx. In the first quarter, we also saw — over the last couple of years, supply chains, our vendors have had some disruption in their ability to deliver trucks being the best example. And in the first quarter, we saw a little bit of a catch-up in terms of us receiving more of those trucks. And so we saw a bit of an increase there too in the first quarter. I expect for the year that we’re going to likely be right around 4%. Longer term, we still believe 3.5% to 4%. But because of SAP and sort of that catch-up might be a little closer to 4% this year.
Operator: And our next question comes from Heather Balsky from Bank of America.
Heather Balsky: I was hoping, first, you could talk about your exposure to the auto sector and any exposure you may have to, I guess, some of the current disruption? And then two, if you could talk about through the end markets, are there any areas where just in this macro, you’re seeing softness and areas where you’re seeing strength would be great?
Todd Schneider: Heather. Yes, we’re certainly watching what’s going on with the auto worker strike, but it is not affecting us in any material way whatsoever. We have a very broad-based customer base. And as a result of that, it’s not affecting us to any material degree whatsoever. And keeping in mind that we have no one customer that’s greater than 1% of our revenue and no even sector that’s greater than 10% for 3-digit NAICS codes. So that helps us and insulates us a bit from all that. As far as the macro environment, it really — it varies based upon the sector, geography, whether they’re goods producing or services providing. But the labor market is a little easier, but still not easy. And you see that through the — what we’ve — what we’re reading with the job openings, still 9.5 million job openings.
And that affects our customer base from a standpoint of them trying to attract and retain people. We would love to see those jobs filled because we think that would be really good for our customers and for the economy in general.
Operator: And our next question comes from Justin Hauke from RW Baird.
