Prices of Building Materials Increases in April, Like Most Goods


Inflation in prices received by producers (prior to sales to consumers) rose 0.2% in April according to the latest Producer Price Index release by the Bureau of Labor Statistics.  The gains were broad-based as the prices for goods and services which posted increases of 0.2% and 0.1%, respectively. Prices for goods advanced 0.2% as declines in prices for trade, transportation, and warehousing were more than offset by a 0.3% increase among all other service prices.  Prior to the 1.8% increase in March, energy prices had declined in seven of the prior eight months. The price index for core goods (i.e. goods less food and energy) rose 0.3%.

Softwood lumber prices rose 2.7% in April, reaching their highest reading since February 2015. The Alberta wildfires do not appear to have affected supply yet, but the U.S. dollar remains relatively strong against the Canadian dollar.  An increase in interest rates by the monetary policymaking committee of the Federal Reserve at their upcoming June meeting has the potential to exacerbate this exchange rate effect. This is because higher interest rates offer lenders in an economy a higher return relative to other countries. Therefore, higher interest rates attract foreign capital and cause the exchange rate to rise.


OSB prices rebounded 3.9% in April, reversing course after four consecutive months of decline, and prices for concrete increased in line with their long-run trend.  Gypsum prices rose nearly 5%, a gain not seen since January of last year.



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1 reply

  1. Percentages are important but so are current dollars. I would like to see averge dollars by region included.

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