Building Materials Prices Little Changed in October

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Prices paid for goods used in residential construction climbed 0.2% in October (not seasonally adjusted) according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The index for inputs to residential construction, goods less food and energy (i.e. the “core”)—a less volatile price measure—increased 0.2% over the month. The core index for building materials has increased 4.2% since declining 0.6% in April and is up 4.5% year-to-date (YTD).

A decrease in prices paid for softwood lumber (seasonally adjusted) held increases in other inputs in check over the month. After climbing 90.9% over a five-month period, softwood lumber prices decreased 7.4% in October. Prices remain historically high, however, 76.9% higher than they stood in April.

In addition to nominal price increases and tariffs on Canadian lumber, cross-border purchasers have been hurt by a weakening U.S. dollar (USD) since March. The value of the USD relative to the Canadian dollar is 9.9% lower than it was in the spring.

Prices paid for gypsum products declined 0.4% in October following a 0.2% increase in September (seasonally adjusted). Gypsum prices have decreased 3.3% YTD and 0.3% over the past 12 months.

Prices paid for ready-mix concrete (RMC) decreased 0.6% in October (seasonally adjusted), partially offsetting the abnormally large 1.5% September increase.

The only region to experience a price increase in October was the Northeast (+3.1%). Prices fell in the Midwest, South, and West by 0.9%, 1.2%, and 2.2%, respectively (not seasonally adjusted).

Other changes in indexes relevant to home building and infrastructure are shown below.



1 reply

  1. This is such an insightful article! Thanks for sharing.

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