As Kathy mentioned, I think in her opening comments, we have seen the impacts of the higher costs coming into the factory now that maybe we didn’t see quite so much of in late last year and early this year. But as we roll forward our forecasts and we kind of look at how we think the year is going to play out, we feel pretty good about where things are lined up. Operating expenses increased $27 million or 26% in the quarter. Sales and volume-based expenses increased $18 million against a very low comparable in the prior year. New product development and currency translation rates each increased operating expenses by $3 million.
We also saw unfavorable mix on a sequential basis due to projects in Asia-Pacific in the Industrial segment. Forward-looking statements reflect management’s current views and speak only as of the time they are made. The company undertakes no obligation to update these statements in light of new information or future events. Graco makes equipment and systems that move, mix, measure, control, dispense, and spray all kinds of adhesives, coatings, fluids and sealants. For crumby messes, we use a handheld vacuum with a crevice tool; baby wipes work well for cleaning spills and debris that accumulates in the cup holders. With our younger son, we started using the Graco when he was around 1 year old and still use it in the rear-facing position.
Save your favorite colors, photos, and past orders all in one place. With PaintPerks, you’ll always be the first to hear about big sales and have access to everyday savings and exclusive offers. Plus, you can order your paint and supplies right from our site. Graco maintains an aggressive strategy to design and develop new products and systems and distributes through a worldwide network of distributors and other channels. Graco is focused on expanding into new markets through product development and acquisitions. The FTC’s complaint alleges that the acquisitions eliminated head-to-head competition among Graco, Gusmer, and GCI, leaving the market almost entirely in Graco’s hands.
There’s a lot more good projects out there and we should see the benefit of that. And again, those two businesses, they really sell through common distributors. The technical aspects of the product lines are actually quite similar. So we think graco booster seat that putting those two groups together, again, will help us energize some organic growth and maybe get some more leverage out of the growth that we do get. I think pretty normal, if you were to strip out all of the noise that’s in there.
We are optimistic that incoming order rates will remain good in all regions during the second half of the year. However, from a growth rate perspective, our comparisons become much more difficult due to the large increases experienced in the second half of last graco jogging stroller year. A few comments as we look forward to the rest of the year. We expect unallocated corporate expense to be approximately $30 million and can vary by quarter. Cash flows from operations are at $220 million for the year compared to $143 million last year.
As a — I guess, as a former operating person, I would say that the challenge to the current process is of course we’re willing to move forward. On the capex side, yes, the company, as you know, has been aggressively investing in really new facilities and plant and equipment to improve productivity, etc, for several years now. We announced our investment in a new manufacturing facility next to Rogers, Minnesota. And we’re in the process of breaking ground on that.
Obviously, our outlook is probably a little — from a growth rate perspective is probably stronger in the businesses that were weak last year versus what we might experience for CED. CED is really the only business that I would characterize as being seasonal. And they typically do have their strongest quarters in Q2 and Q3 if you look back historically. And at least as we sit here right now, like we said a couple of times, Puerto Rico look pretty decent and absolute demand sort of fits back that overall pattern.
And I think that they’re set up for a good second half as long as the volumes continue to stay where they’re at. I think the inventory increase has been somewhat reflective of the business levels. There isn’t anything really funny going on there. And I think looking back at the schedule from second quarter last year, you see the point that Mark is making pretty dramatically. I don’t have the chart in front of me now, but April and May were very soft. And then, we saw a sharp, it’ something like 25 or 26 percentage points in contract revenue in the month of June last year.
Graco airless paint sprayers deliver the best combination of speed and a high-quality finish. Our airless technology ensures a uniform and flawless coat of paint coverage on all surfaces whether you’re painting interiors or exteriors. And it was really going to be important to assess the compatibility and the staying power of the management group. And there simply was no time for me to — in those circumstances to go, meet the people face to face and participate in any reasonable way on the timetable they were insisting that the process be conducted with. Obviously it costs a heck of a lot more to build a house today than it did a year ago.
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