Inflation at the Producer Level in November – Gas Powered Declines Don’t Help Wood Products Prices

The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for November. Inflation in prices received by producers (prior to sales to consumers) declined 0.2% in November from October driven by falling energy prices. Excluding food and energy, core price were down 0.1%.

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Softwood lumber prices dipped 2.1% for the month but have mostly moved sideways in 2014, up 0.8% from one year ago. OSB prices ticked up 0.7% in November but are down 9.9% from year ago levels. OSB prices have leveled off somewhat from the steep decline in 2013. “Random Lengths” (a wood products trade publication) reports that fuel price declines are not flowing through to wood products prices because transportation bottlenecks, mainly driver and truck shortages, are propping up transportation costs. Forecasts for wood products prices are relatively flat through most of 2015 despite falling fuel prices.

Gypsum prices inched up 0.3% in November, are up 11.1% in the last 12 months, and are poised to reach new heights in 2015 if producer announced prices hikes take effect.

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