Building Materials Prices Post a 0.9% Increase in January, Ending Four Consecutive Monthly Declines

A closer look at the US Bureau of Labor Statistics (BLS) Producer Price Index (PPI), released on Thursday (2-16-23), with a focus on the cost of construction materials and additional analysis provided by the National Association of Home Builders (NAHB), reveals that after four consecutive monthly declines, the PPI for inputs to residential construction less energy rose 0.9%, not seasonally adjusted, in January. Price growth of goods inputs to residential construction, including energy, gained 1.4% over the month and have increase 5.1% year-over-year.

Here is the product breakdown:

• Softwood lumber, seasonally adjusted, fell 7.6% in January—the sixth consecutive monthly decline. Over that same period, the index has declined 23.3%.
• Ready-mix concrete (RMC) prices continued to increase at a historic pace. The RMC price index increased 0.9% in January after posting a 13.6% full-year gain in all of 2022. Since January 2021, RMC prices have increased in all but two months.
• Gypsum building materials were unchanged in January, following a 0.2% decline in December 2022. Gypsum products prices are 11.1% higher than a year ago. However, gypsum products pricing began to stabilize in August 2022, and in past five months, price have been essentially unchanged.
• Steel mill products pricing decreased 2.3% in January, following a 3.3% decline in December 2022. Although the pace of declines has slowed, prices have decreased 27.8% in since May 2022 and are down 30.1% over the past 12 months.