Bureau of Labor Statistics Producer Price Index, With Focus on Building Materials, Released for August

A deeper look into the Bureau of Labor Statistics August Producer Price Index (PPI), with a focus on building materials and additional analysis provided by the National Association of Home Builders (NAHB), reveals that price of building materials rose (not seasonally adjusted) 0.5% in August. Prices increased even as softwood lumber prices declined 5.2% in the month.

NAHB reports that building materials prices have climbed 4.9% since the start of 2022 (January–August) and 14.3% year-over-year in the same time period. The PPI for goods inputs to residential construction—including energy—decreased 0.9% in August, following a 1.5% decline in July.

In August, the price index of service inputs to residential construction was 0.2% lower—the fourth consecutive monthly decline—with decreases in the building materials wholesaling and retailing indices. The service PPI is 5.0% higher than it was 12 months prior and 32% higher than pre-pandemic levels.

Here is a breakdown by product:

  • The PPI for gypsum building materials increased 3.3% in August—the seventh consecutive monthly increase. Since the start of 2021, the gypsum index has increased 38.9%.
  • The PPI for ready-mix concrete (RMC) gained 1.6% in August—its fifth consecutive monthly increase and the twenty-first gain in over the past two years. The index has climbed 8.1% year-to-date, the largest YTD August increase over the past three decades.
  • The PPI for softwood lumber (seasonally adjusted) declined 5.2% August. Softwood lumber prices have declined four out of the past five months by a total of 37.7%. Year-to-date softwood lumber prices have dropped 32.7% but still remain 46.4% above pre-pandemic levels.
  • Steel mill products prices fell 5.7% in August, following a 3.9% decline in July. The steel product index has declined 13.8% since the start of 2022 and is down 15.4% since setting a record high in December 2021.
  • The price of truck transportation of freight decreased 1.9% in August but remains 8.4% higher year-over-year. Over the past eight months, the price of trucking has increased 7.2%, rail freight has climbed 8.4%, and ocean-going freight has soared 26.5%.

FEA compiles the Wood Markets News from various 3rd party sources to provide readers with the latest news impacting forest product markets. Opinions or views expressed in these articles do not necessarily represent those of FEA.