Prices of Goods Used in Residential Construction Increase 1.4% in March—Now Up 20.4% Year-Over-Year

Posted on April 13, 2022

According to the latest Bureau of Labor Statistics (BS) Producer Price Index (PPI) report released today (4-13-22), with additional analysis provided by the National Association of Home Builders (NAHB), the prices of goods used in residential construction ex-energy (not seasonally adjusted) climbed 1.4% in March.

The increase follows an upwardly revised increase of 2.2% in February and 4.1% in January. This adds up to an 8% jump in building materials prices since the start of 2022. Year-over-year, building materials prices increased 20.4% and have risen 33% since the start of the pandemic.

The price index of services inputs to residential construction registered even steeper increases, rising 3.2% in March, 5.1% in February, and 6.2% in January. As a result, the price index of services used in home building (including trade services, transportation, and warehousing) went up 15.2% since the start of the year. Year-over-year, the index increased 18.5%. Since the start of the pandemic, services prices are now 39% higher.

The ‘Ups and Downs” of the March Construction Materials PPI analysis:

  1. In contrast with the overall ongoing building materials price increases, steel mill products prices (NSA) declined 4.9% in March, the third consecutive monthly decrease after record-breaking increases over the prior 15 months. While the first three months of 2022 have been good months for the cost of derivative steel products, the price index more than doubled since the start of the pandemic.
  2. The PPI for ready-mix concrete (RMC, SA) came down 0.6% in March but remains elevated after climbing relentlessly over the prior 13 months. It is 9% higher compared to the January 2021 reading.
  3. The PPI for gypsum products (SA) increased 1.6% in March. Year-over-year, gypsum product prices are 20.8% higher.
  4. The seasonally adjusted PPI for softwood lumber increased 6% in March, following a 2.6% increase in February and a 25.6% increase in January. Over the first three months of 2022, the index has increased 37.6%. Since reaching its most recent low point, in September 2021, prices have almost doubled, rising 90.4%.
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