Residential Building Materials Prices Climbed in March
A closer look into the Bureau of Labor Statistics (BLS) March Producer Price Index (PPI), with a focus on residential building materials and additional analysis provided by the National Association of Home Builders (NAHB), reveals that the price of building materials used in residential construction rose 0.3% in March (not seasonally adjusted). After declining in the last four months of 2022, the index has increased three months in a row—by a total of 1.6%—but has been relatively stable over the past year overall.
The prices of goods inputs to residential construction, including energy, gained 0.1% during the month of March, as a 6.4% decrease in energy prices offset increases in other product categories.
Here is a breakdown by product:
- The PPI for softwood lumber (seasonally adjusted) fell 4.0% in March, marking its eighth consecutive monthly decline. Since reaching its peak in March 2022, the index has fallen by 52.5% and is now just 11.5% above the January 2020 level.
- An acute shortage of distribution transformers remains ongoing: The PPI for power and distribution transformers increased 2.0% in March. Over the past two years, prices have rocketed 63.9% higher, with declines only recorded in just two months over the time period.
- The price of ready-mix concrete (RMC) continues to increase, gaining 0.7% in March after increasing 0.9% in January and 0.6% in February. Year-over-year, RMC prices have increased 13.1% and are up 24.2% since January 2021.
- The PPI for gypsum building materials declined 0.1% in March after increasing 0.4% in February. Gypsum building materials prices are 11.8% higher than a year ago, but they began to stabilize in September 2022. In the past 6 months, prices have been stable—up just 0.2%.
- Steel mill product prices increased 1.2% in March after posting a 2.5% gain in February. This was the second monthly price increase since May 2022. Nonetheless, the prices of steel mill products have dropped 25.2% since May 2022 and are down 15.1% year-over-year.
The PPI for service inputs to residential construction declined 0.8% in March, following a 0.6% decrease in February. Year-over-year, prices for services have dropped 15.2% but remain 23.2% higher than the pre-pandemic level at the start of 2020.
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.