US Building Material Prices Climb 6.9% Year-Over-Year in May

A closer look at the Bureau of Labor Statistics (BLS) Producer Price Index for May, with analysis by the National Association of Home Builders (NAHB), shows that prices for inputs to new residential construction—excluding capital investment, labor, and imports—rose 1.3% in May, following continued increases in energy-related costs.

Year-over-year, the inputs to residential construction price index increased 6.9%. The goods component increased 8.3%, while services rose 4.7%.

Residential building material prices excluding energy increased 0.7% in May and were up 4.4% from a year earlier, the strongest annual increase since January 2023.

Input goods, which account for about 60% of the index, rose 2.1%—the largest monthly increase since March 2022. Among key materials, No. 2 diesel fuel prices surged 105.9% year-over-year. Metal molding and trim prices increased 42.9%, while softwood lumber prices rose 5.6% from a year earlier. Ready-mix concrete prices were up 1.7%, while gypsum building materials prices declined 1.1%.

Service inputs to residential construction were unchanged in May but advanced 4.7% year-over-year. The category is broken into three components: trade services (about 60%), other services (about 29%), and transportation and warehousing services (about 11%). Trade services rose 3.8% year-over-year, transportation and warehousing services increased 17.3%, and other services advanced 1.7%.