US Construction Input Prices Rise in March as Energy Costs Surge

A closer look at the Bureau of Labor Statistics (BLS) Producer Price Index for March, with analysis by the National Association of Home Builders (NAHB), shows that prices for inputs to new residential construction rose in March, alongside a sharp surge in energy costs.

The price index for inputs to new residential construction rose 1.2% in March and was up 3.8% from last year.

Input goods, which account for about 60% of the index, rose 1.8% month-over-month. Energy input prices jumped 21.4% in March and were up 20.8% year-over-year—the fastest monthly increase since June 2020. In contrast, building material prices (excluding energy) rose a more modest 0.4% in March and were up 3.1% from a year earlier, marking the eleventh consecutive monthly increase.

Among key inputs, No. 2 diesel fuel prices surged 51.2% year-over-year, while metal molding and trim increased 45.5%. Offsetting some of these gains, particleboard and fiberboard prices fell 15.7%, asphalt declined 12.3%, and softwood lumber prices were down 7.8%.

Service inputs to residential construction rose 0.3% in March and were up 3.1% year-over-year. Trade services increased 3.3% from a year earlier, while transportation/warehousing services rose 6.2% and other services advanced 1.5%.