Building Materials Prices Decline in April Despite Increased Lumber Costs

According to the latest Producer Price Index report, the prices of inputs to residential construction less energy (i.e., building materials) decreased 0.2% in April 2023 (not seasonally adjusted). The index has gained 0.5%, year-to-date, which is the smallest April YTD increase since it climbed 0.3% over the first four months of 2020.

The PPI for goods inputs to residential construction, including energy, was unchanged over the month as a 1.7% increase in energy prices offset declines in other product categories. The index has declined 0.8% over the last 12 months but is 23.9% higher than the level suggested by the pre-2020 trend.

Gypsum Building Materials

The PPI for gypsum building materials fell 1.1% in April after increasing in February and March. Gypsum building materials prices are 12.1% higher than they were a year ago but began stabilizing in September 2022. Prices have increased 0.6% the seven months since.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) increased 6.2% in April–the first increase since July 2022 and just the second since March 2022. Prices have increased 0.9% YTD but are 40.1% lower than they were one year ago.

Ready-Mix Concrete

Ready-mix concrete (RMC) prices increased 0.4% in April after climbing 0.9% in March. The monthly increase was the smallest since prices fell 0.3% in March 2022.  RMC prices have risen 1.8%, year-to-date, and 12.4% over the past 12 months.

The monthly increase in the national data was driven by prices in the West and Northeast which climbed 2.0% and 1.6%, respectively. Prices saw smaller increases in the Midwest (+0.2%) and South (+0.5%). Year-to-date, prices have increased the most in the Northeast, followed by the West, Midwest, and South regions.

Steel Mill Products

Steel mill products prices increased 3.1% in April after climbing 3.1% in February and March combined. Although this was the third consecutive monthly increase and the fourth over the past year, prices have fallen 14.8% over that period.

Services

The price index of services inputs to residential construction increased 1.0% in April after climbing 0.4% in March. Prices have declined 13.0% over the past year but are 26.3% higher than the pre-pandemic level at the start of 2020.

Transportation of Freight

The price of truck and deep sea (i.e., ocean) transportation of freight decreased 1.7% and 0.4%, respectively, in April while the PPI for rail freight increased 0.4%. Trucking freight prices have declined 8.5% over the past year. The prices of long-distance and local motor carrying have fallen 10.0% and 4.1%, respectively.