OSB, Lumber, and Gypsum Lead Building Materials Prices Lower in November

Softwood lumber prices fell 3.0% in November the second consecutive decrease for the index to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics. The producer price index for softwood lumber has fallen 23.6% (not seasonally adjusted) since setting cycle and all-time highs in June (see below). After the decrease, the index level is 9.6% lower than the prior-cycle high set in 2004.

The final demand price index for OSB has followed a path similar to—but steeper than—that of softwood lumber over the last four months (see below). After November’s 13.7% decrease, OSB prices have declined 28.0% over that period (not seasonally adjusted), while softwood lumber final demand prices have declined a more modest 21.7%.

The final demand producer price index for OSB is now 0.6% lower than it was in January 2018.

Residential construction goods input prices (not seasonally adjusted) decreased 1.7% in November, just the third decrease—and by far the largest—over the past 12 months. The other decreases, -0.1% and -0.5%, came in December 2017 and August 2018, respectively. The decrease brought parity between year-to-date (YTD) changes in 2017 and 2018 (+3.8%), marking the first time this year that YTD increases in 2018 have not outpaced those of 2017.

Prices of gypsum products and ready-mix concrete fell by 2.9% and 0.3%, respectively, in November. The price index for gypsum products remains 3.2% higher than it was to start 2018, but the year-to-date price increase masks large fluctuations within the year. Consecutive-month increases of 5.4% and 6.1% have now been partially offset by two- and three-month decreases of 3.3% and 4.6%, respectively.

Ever since a large price increase (relative to historical data) in early March 2018, prices of ready-mix concrete have dropped 1.6% (seasonally adjusted).



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