Prices paid for goods used in residential construction decreased 0.8% in March (not seasonally adjusted) according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The year-to-date decline in residential construction inputs prices is the first January-to-March decrease since the Great Recession.
Building materials prices have fallen 1.8% since March 2019 by -0.15% per month, on average. In contrast, prices increased 0.17% per month, on average, from March 2018 to March 2019.
Prices paid for gypsum products increased 2.2% in March (seasonally adjusted) after posting a record 5.2% decline in February. The price index for gypsum products has decreased 3.1% in 2020 and has fallen 8.4% since its most recent peak in March 2018.
The PPI report shows that softwood lumber prices rose 3.7% (seasonally adjusted) in March, following a 2.0% increase in February 2020. The increase is at odds with prices reported by Random Lengths, which showed prices falling more than 13% over the month.
The discrepancy between the BLS and Random Lengths data likely stems from timing differences, as nearly 60% of the decline took place over the final 10 days of March. Some of that change—and possibly the 4% drop seen in the first three days of Random Lengths data for April—should be captured in next month’s PPI report.
Prices paid for ready-mix concrete (RMC) advanced 0.7% in March (seasonally adjusted), following a 0.7% increase in February. The RMC index has increased 7.2% since January 2018.
Other changes in indexes relevant to home building are shown below.
Can you please provide the calculation from the BLS data for the opening statement…
“Prices paid for goods used in residential construction decreased 0.8% in March“
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