Prices for Inputs to New US Residential Construction Climb in July

A closer look at the Bureau of Labor Statistics (BLS) Producer Price Index (PPI) for July, with analysis by the National Association of Home Builders (NAHB), reveals that prices for inputs to new residential construction—excluding capital investment, labor, and imports—rose 0.2% in July, following a 0.8% increase in June.

The inputs to new residential construction price index rose 2.8% year-over-year. The goods component increased 2.4%, while services rose 3.3%. For comparison, the total final demand index rose 3.3% over the same period, with goods up 1.9% and services up 4.0%.

The largest year-over-year input price increase was for construction machinery and equipment parts, which jumped 31.4%. Metal molding and trim rose 25.6%, fabricated steel plate increased 14.3%, and nonferrous wire and cable rose 10.5%. NAHB noted that metal commodities remain heavily targeted by tariffs, including 50% duties on steel, aluminum, and semifinished copper products.

Prices for service inputs to residential construction fell 0.2% in July but were up 3.3% from a year earlier. The service input index includes three components: trade services, up approximately 60%; other services excluding trade, transportation, and warehousing, up about 29%; and transportation and warehousing services, up roughly 11%.

According to the latest available data (May), NAHB reported that prices for domestically produced goods used in new construction rose 1.6% year-over-year, compared to a 0.1% increase for imported goods. Service prices rose 2.7% over the same period. Input prices across all categories remain elevated compared to pre-pandemic levels.