First Year-to-Date Drop in March Building Materials Pricing Since the Great Recession

According to the Bureau of Labor Statistic latest Producer Price Index (PPI) report, prices paid for goods used in residential construction fell 0.8% in March, not seasonally adjusted. The year-to-date decline in residential construction input prices is the first January-to-March since the Great Recession. Building materials prices have fallen 1.8% since March 2019 by 0.15% per month, on average. This in contrast to prices increasing 0.17%, on average from March 2018 to March 2019. The PPI is reporting that softwood lumber prices rose 3.7% (seasonally adjusted) in March following a 2.0% increase in February 2020. Of note, the report is at odds with prices reported by Random Lengths, which showed prices falling more than 13% over the month of March. It appears the difference is due to the timing of the information gathering for the PPI.