US Building Materials Costs in Residential Construction a Mixed Bag in April

Posted on May 14, 2024

A closer look at the Bureau of Labor Statistics’ (BLS) latest Producer Price Index (PPI), with a focus on inputs to residential construction and analysis provided by the National Association of Home Builders (NAHB), reveals that the prices of goods used in residential construction, less energy, increased for the sixth consecutive month in April.

According to the NAHB analysis, the non-seasonally adjusted PPI index for residential construction materials increased 0.14% in April, after increasing a revised 0.50% in March. Year-over-year, the index is up 2.77%—the largest yearly increase since 2.80% in February 2023.

The average yearly increase, over all 12 months, was 2.50% in 2020, 14.62% in 2021, 15.18% in 2022, and 2.34% in 2023. Over the first four months this year, the average change was +2.32%.

The product breakdown for the April PPI is as follows:

  • The seasonally adjusted PPI for softwood lumber increased 6.20%. This marks the largest month-over-month increase since January 2022, when the index soared 21.56%. Year-over-year, the index was 4.31% lower.
  • The PPI for gypsum building materials, non-seasonally adjusted, declined 0.74%. Despite falling over the month, the price of gypsum building materials was 1.00% higher than April 2023.
  • The PPI for ready-mix concrete (RMC), seasonally adjusted, declined for the first time in four months, down 0.27%. Prices for RMC have continued to increase since 2021, as this was only the fourth price decline since January 2021. Year-over-year, prices were 8.04% higher.
  • Steel mill product pricing, not seasonally adjusted, declined for the second consecutive month, falling 2.67% after an 8.10% drop in March. Year-over-year, prices were 9.79% lower.
  • The non-seasonally adjusted special commodity grouping PPI for copper rose 3.46%. Year-over-year, the index was up 4.46%. According to NAHB, copper futures pricing was trading near $4.90 per pound on Tuesday, its highest level since early 2022 at $5.00 per pound.
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