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.