Higher Softwood Lumber Prices Push Building Materials Prices Higher in July

The Bureau of Labor Statistics (BLS) is reporting that in July’s Producer Price Index (PPI) prices paid for goods used in residential construction continued their upward path, increasing by 1.8% (not seasonally adjusted). This is the third straight month of increases, following a three straight month decline (February, March and April) of -5.4%. Year-to-date (YTD) the PPI for residential construction materials has declined -1.3% The increase in prices paid for building materials was led by a 11.0% increase in softwood lumber prices in July. Since decreasing -10.8% in April, softwood lumber prices have risen 29.3% and are now roughly equal to prices paid during the peak of the early- to mid-2018 runup. Although prices paid for softwood lumber are near 2018 records in level terms, the YTD percentage increase in 2020 (+22.0) is far greater than it was in 2018 (+13.8%). Nationwide, prices for goods used in residential construction rose 2.7% in both the Midwest and Northeast and 1.1% in the South. Prices in the West fell -5.6% month over month