Overall, the price of materials inputs to residential construction declined 1.8% in December (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics. While most building materials prices showed little movement in December, prices paid for OSB fell by double digits for the second consecutive month.
OSB prices declined 12.0% (NSA) in December after falling 13.7% in November. Prices paid for OSB decreased 22.4% in 2018 and have fallen 36.7% since hitting their most recent peak.
Although softwood lumber prices rose by 1.0% (NSA), the increase followed five consecutive monthly declines totaling 23.6%. The path of prices since June 2018 has been similar to that of OSB, according to BLS (see below).
Data from Random Lengths shows even steeper declines over the latter half of 2018. Unlike the PPI, which excludes the prices of imports, Random Lengths data includes purchases in the United States and Canada regardless of the country of origin. These data show that the prices of OSB and softwood lumber have fallen 52.0% and 43.0%, respectively, since June’s high mark.
The prices of other goods used in residential construction changed experienced modest increases in December. Gypsum products and ready-mix concrete ticked up by 1.8% and 0.5% (seasonally adjusted), respectively. This concluded a volatile, rollercoaster year for the gypsum products price index, which ended 2018 3.0% higher than it stood in December 2017.