Prices paid for goods used in residential construction increased 1.5% in March (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics. Prices have risen more quickly thus far in 2019 than they did during the same period in 2018 and are at their highest level since last October (see below). The average January-to-March increase since 2000 is 1.1%, though the recent trend is inauspicious—prices rose 0.0%, 0.7%, 1.9%, and 2.3% over the first three months of 2016, 2017, 2018, and 2019, respectively.
Consistent with weekly data published by Random Lengths, the PPI report shows that the pace of softwood lumber price increases has recently attenuated. After climbing 2.3% in February, prices paid for softwood lumber rose a modest 0.5% in March.
Over the past year, the PPI for softwood lumber has declined 13.3%. Although the PPI does not include prices paid for imports, Canadian lumber imports indirectly affect the price of domestic softwood lumber (as we have seen with the 20% duties currently levied on Canadian softwood lumber).
Over the past year, the U.S. dollar has strengthened 4.9% against the Canadian dollar. To maintain a given price advantage, U.S. producers must decrease prices, all else held equal. This may explain part of the price decrease of domestically produced lumber over the past 12 months.
OSB prices fell 6.1% in March, the fourth decrease over the past six months. During that period, prices have declined a cumulative 28.7%–largely due to increased production capacity.
The downward trend in prices paid for gypsum products continued in March, as prices declined 0.3% (seasonally adjusted). Prices paid for gypsum products have fallen 8.6% and 9.8% since the start of 2019 and August 2018, respectively. The trend is notable as prices have fallen in six of the seven months–by a total of 10.1%–since the most recent peak last August.
Diesel fuel prices continued their recent upward trend in March, rising 12.6% after a 7.2% increase in February. Prices have increased 20.7% since the two-month, 23.1% decline between November 2018 and January 2019.
Prices paid for ready-mix concrete were flat over the month and remain at the lowest level since April 2018.
 Similarly, the price of domestically produced softwood lumber increased when the U.S. dollar depreciated against the Canadian dollar by 9.8% between April and September of 2017.
 As the February PPI reading for OSB was not released with the rest of the data, a 4.3% increase was estimated using January and February data from Random Lengths. The actual increase in February was 6.5%.