Year-to-Date Price Growth of Building Materials is Slowest in Years

Prices paid for goods used in residential construction decreased by 0.3% in September (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics.

Building materials prices have declined an average of 0.1% per month over the last 12 months, and the price of goods used in residential construction has risen 1.7% in 2019, the slowest year-to-date growth through September since 2015.

The PPI report shows that softwood lumber prices increased 3.8% (not seasonally adjusted) in September—the index’s largest percentage increase since prices rose 4.8% in June 2018. Prices have fallen 8.7% over the last 12 months but remain nearly 15% higher than they were in 2016.

The price index for gypsum products increased 0.3% over September after a 0.5% gain in August (seasonally adjusted). Gypsum products prices have declined by 3.9% since the start of 2019 and are down 8.0% over the last 12 months. Moreover, the 3.9% year-to-date decline represents the largest such decrease since BLS began seasonally adjusting prices in 2012.

Prices paid for ready-mix concrete decreased for the first time in eight months in September, falling 0.6% (seasonally adjusted). The regional indexes for the Northeast, Midwest, South, and West declined 3.5%, 0.8%, 0.0%, and 0.9%, respectively, not seasonally adjusted.

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