Prices paid for goods used in residential construction declined 0.4% in November (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 1.3% in 2019. Not only is that price growth roughly one-third the pace of increases in 2018 (+3.8% YTD), it is the slowest year-to-date growth in four years. In 2015, the price index of goods used in residential construction declined 0.8% between January and November.
The PPI report shows that softwood lumber prices increased 3.5% (seasonally adjusted) in November. The index for softwood lumber has risen 7.7% over the prior three months and now stands at its highest level since September 2018.
The price index for gypsum products increased 1.1% in November after advancing 1.4% in October (seasonally adjusted). Gypsum products prices declined by 9.6% over the first six months of 2019 but have increased 5.7% since. Even after accounting for the recent increase, however, prices remain slightly lower than they were at the start of 2018.
Prices paid for ready-mix concrete (RMC) decreased 0.7% in November (seasonally adjusted) after climbing 0.1% in October (seasonally adjusted). RMC prices have risen 3.1% year-to-date after increasing by only 2.0% YTD by November 2018.
The regional indexes for the Midwest (-1.0%) and South (-2.3%) regions declined in October, while prices rose by 1.5% and 1.3% in the Northeast and West regions, respectively (not seasonally adjusted).