Prices of Building Materials Edge Higher in April

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Prices paid for goods used in residential construction increased 0.8% in April (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 (+3.2%) than they did during the same period in 2018 (+2.8%) and are at their highest level since last October (see below).

Consistent with weekly data published by Random Lengths, the PPI report shows that softwood lumber prices declined in April. After climbing 0.5% in March, prices paid for softwood lumber decreased 1.4% over the prior month. While the PPI for softwood lumber has fallen 12.6% over the last 12 months, 95% of that decline occurred in 2018.

OSB prices fell 3.9% in April, the fourth decrease over the past seven months.[1] During that period, prices have fallen roughly 30%.

The recent downward trend in prices paid for gypsum products reversed course in April, as prices increased 2.2% (seasonally adjusted). Even after the increase, prices paid for gypsum products have fallen 6.8% and 8.1% since the start of 2019 and August 2018, respectively.

Diesel fuel prices also reversed course, albeit modestly, in April. After increasing 8.4% and 12.7% in February and March, respectively, prices paid for diesel fuel decreased 1.5% last month.

The price of ready-mix concrete rose 1.7% in April, marking only the second time in the last four years that prices have increased by 1% or more.


 


[1] As the PPI reading for OSB was not released with the rest of the data, a 3.9% decrease was estimated using March and April data from Random Lengths.



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