Residential building material prices, excluding energy, rose 0.4% in July and were up 5.0% from a year ago. Energy prices fell again in July but remained significantly higher than a year ago. Meanwhile, prices for services were down 0.3% over the month but were 6.2% higher than a year ago.
The Producer Price Index for final demand was unchanged in July, after falling 0.1% in June. Compared to a year ago, final demand prices were up 4.7%. The index for final demand services rose 0.2% in July, while the index for final demand goods fell 0.7% over the month.
The price index for inputs to new residential construction fell 0.1% in July and was up 6.5% from last year. The price of goods used in new residential construction (including energy) was up 0.1% over the month and up 6.7% from last year, while the price of services was down 0.3% over the month and up 6.2% from last year.
Input Goods
The goods component has a larger importance to the inputs to residential construction price index, representing around 60% of the total. On a monthly basis, the price of input goods to new residential construction was up 0.1% in July after falling 0.7% in June.
The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring remaining goods. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.
Energy input prices fell 2.4% in July but were 33.1% higher than a year ago. Building material prices were up 0.4% in July and up 5.0% compared to one year ago. The year-over-year percentage increase in building materials was the highest since December 2022.
Among building materials, softwood lumber prices rose significantly in July, as they were up 7.4% over the month. Softwood lumber prices were up 17.3% from one year ago. Ready-mix concrete prices were down 0.4% over the month and have only risen 2.2% from a year ago.
Input Services
Prices for service inputs to residential construction fell 0.3% in July. On a year-over-year basis, service input prices were up 6.2%. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation, and warehousing component (other services).
The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 7.0% from a year ago. The price of transportation and warehousing services rose 10.9%, while prices for other services were up 2.5% over the year.
