US Residential Building Materials Costs Decline in July

A closer look at the Bureau of Labor Statistics (BLS) Producer Price Index (CPI), with a focus on building materials costs and analysis by the National Association of Home Builders (NAHB), reveals that inputs to residential construction, goods less foods and energy, decreased 0.04% in July.

The index for inputs to residential construction, goods less food and energy, represents building materials used in residential construction. Compared to a year ago, the index was up 2.01% in July, marking the sixth straight month above 2% growth. The NAHB notes that just past the midpoint of 2024, the year-to-date increase is 0.47%; this is slightly higher yet similar to the 0.44% increase in same period in 2023.

The product breakdown is as follows:

• The seasonally adjusted PPI for softwood lumber fell 1.04% in July, after rising 3.29% in June. Softwood lumber prices were 13.12% lower in July 2023.
• The non-seasonally adjusted PPI for gypsum building materials increased 0.08% in July after no increase in June. Compared to last year, the index was up 4.25%—the highest yearly increase since April 2023, when the index was up 12.14%.
• The seasonally adjusted PPI for ready-mix concrete rose 0.03% in July after falling 0.15% in June. Monthly growth in prices for ready-mix concrete has been relatively flat for four consecutive months after prices peaked in March. Over the year, ready-mix concrete prices were 5.05% higher in July 2023.
• The non-seasonally adjusted PPI for steel mill products fell for the second straight month, down 3.29% in July. Steel mill product prices are 13.99% lower than last year. Overall, steel mill product prices have fallen 36.99% since peaking in December of 2021.
• The non-seasonally adjusted special commodity grouping PPI for copper rose 0.56% in July after falling 2.79% in June. Over the year, the index was up 14.26%.