Producer Prices in November – Energy Price Declines Push Overall Prices Down – Little Relief For Home Builders

The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for November. Once again energy prices are the main driver. The PPI for finished goods declined 0.8%, led by a 4.6% decline in the energy index. Core producer prices (i.e., excluding food and energy) rose 0.1%. Historically, core prices have been relatively stable, averaging monthly increases of 0.2%, while energy prices have been the main source of volatility.

blog ppi 2012_12_1

In comparison to the relative calm of overall producer prices, prices for the inputs for home building have seen significant increases so far this year. In November gypsum and softwood lumber added to their gains in 2012, with prices 14% and 13% higher, respectively, than at the start of the year. Prices for OSB retreated slightly but remain 50% above last December’s level.

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0 replies

  1. Friends, we must make it for less, build it for less … and sell it for less (even if that means to cut profits).. that’s the way to increase the business!

  2. OH I forgot: and yet must provide higher (better) quality!

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