US Residential Building Materials Costs Continue to Climb in March

A closer look at the Bureau of Labor Statistics’ (BLS) latest Producer Price Index (PPI) report (4-11-24), with a focus on 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 fifth consecutive month in March.

The non-seasonally adjusted index increased 0.21% in March following a 0.54% increase in February. The NAHB notes that while the increases are slowing, the index continues to grow at a faster rate than in 2023, when the average change was 0.15%.

The product breakdown for the March PPI is as follows:

• Softwood lumber prices rose for the first time since July 2023, increasing 1.90% month-over-month. However, prices were down 6.76% year-over-year. The NAHB notes that this marks the 17th consecutive monthly decline, as lumber prices in 2023 were much more stable than between 2020 and 2022. Compared to March 2020, the PPI for lumber was 5.98% higher.
• The PPI for gypsum building materials, non-seasonally adjusted, increased for the second straight month, rising 2.24% following a 2.95% increase in February. The index reached a new high in March and was 1.33% higher year-over-year.
• The PPI for ready-mix concrete (RMC), seasonally adjusted, increased 0.05%, following a 0.84% increase in February. Year-over-year, RMC prices were 7.00% higher.
• Steel mill product pricing, not seasonally adjusted, posted their first decline after three consecutive monthly increases, falling 7.77%. This was the largest month-over-month decline since February 2022 when the index declined 9.38%. Year-over-year, steel mill product prices were 3.59% lower.