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%.