US Residential Building Materials Costs Climb Higher in January

A closer look at the Bureau of Labor Statistics’ latest Producer Price Index (PPI), with a focus on residential construction material costs and additional analysis provided by the National Association of Home Builders (NAHB), reveals that inputs to residential construction (goods less food and energy, not seasonally adjusted) increased 1.28% month-over-month in January.

The NAHB notes that this is largest monthly change for the index since March 2022, when it increased by 2.07%. Year-over-year, the index was 1.91% higher—the largest yearly increase since February 2023.

The product breakdown for January is as follows:

• Seasonally adjusted, the PPI for softwood lumber fell 1.82%, the sixth consecutive monthly decline. Over the past 12-months, softwood lumber prices have declined 8.98%. The NAHB notes that earlier in February, the US Department of Commerce signaled plans to increase tariffs on Canadian softwood lumber from the current 8.05% to 13.86% sometime this summer or fall.
• The PPI for gypsum building materials (not seasonally adjusted) was unchanged from December. However, year-over-year, it was 1.92% lower.
• The PPI for ready-mixed concrete (RMC) increased 1.37%, seasonally adjusted, after declining 1.27% in December. On a yearly basis, RMC was up 6.88%.
• The PPI for steel mill products (not seasonally adjusted) increased 5.4%, marking the second consecutive monthly increase. Year-over-year, steel mill products were up 4.39%.