Building Materials Prices Climb as Concrete, Transformer Shortages Persist

According to the latest Producer Price Index report, the prices of inputs to residential construction less energy (i.e., building materials) climbed 0.3% in March 2023 (not seasonally adjusted). Since declining the last four months of 2022, the index has increased three consecutive months by a total of 1.6% but has been relatively stable over the past year.

The prices of goods inputs to residential construction, including energy, gained 0.1% over the month as a 6.4% decrease in energy prices offset increases in other product categories.

Distribution Transformers

As the shortage of distribution transformers continues, the PPI for power and distribution transformers increased 2.0% in March. Prices have surged 63.9% over the past two years and declined in just two months over that span.

Ready-Mix Concrete

The trend of ready-mix concrete (RMC) prices continued its historic pace as the index increased 0.7% in March after gaining 0.9% and 0.6% in January and February, respectively.  RMC prices have increase 13.1% over the past 12 months and 24.2% since January 2021.

The monthly increase in the national data was broad-based geographically but was primarily driven by prices in the Northeast (+1.7%). Prices climbed 0.6% in the West, 0.9% in the South, and were unchanged in the Midwest.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) fell 4.0% in March–the eighth consecutive monthly decline. Since peaking in March 2022, the index has fallen by more than half (-52.5%) and is now just 11.5% above the January 2020 level.

Gypsum Building Materials

The PPI for gypsum building materials decreased 0.1% in March after increasing 0.4% the month prior. Gypsum building materials prices are 11.8% higher than they were a year ago but began stabilizing in September 2022. Prices have been stable—up just 0.2%–in the six months since.

Steel Mill Products

Steel mill products prices increased 1.2% in March after climbing 2.5% in February. This was the second monthly price increase since May 2022. Even so, prices have dropped 25.2% since May 2022 and are down 15.1% over the past 12 months.

 

Services

The price index of services inputs to residential construction decreased 0.8% in March, following a 0.6% decline in February. Prices have declined 15.2% over the past year but are 23.2% higher than the pre-pandemic level at the start of 2020.

Transportation of Freight

The price of truck, deep sea (i.e., ocean), and rail transportation of freight decreased 2.9%, 0.4% and 0.2%, respectively, in March. Of the three modes of shipping, trucking prices have declined the most over the past 12 months, down 6.8%. Over that period, long-distance and local truck freight prices have fallen by 8.0% and 2.4%, respectively.

 

 

 


Discover more from Eye On Housing

Subscribe to get the latest posts to your email.

One thought on “Building Materials Prices Climb as Concrete, Transformer Shortages Persist

Leave a Reply