The Producer Price Index for final demand was up 0.3% in October, after rising 1.4% in September. Compared to a year ago, final demand prices were up 6.5%.

The price of goods used in new residential construction (including energy) was unchanged over the month and up 9.8% from last year, while the price of services was up 0.7% over the month and up 11.3% from last year. Combining goods and services, the price index for inputs to new residential construction was up 0.3% in October and 10.4% higher than 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 unchanged in October after rising 1.7% in September.

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 3.3% in October and were 64.8% higher than a year ago. Building material prices were up 0.5% in October and up 5.8% compared to one year ago. Energy prices fell monthly as No. 2 diesel fuel prices fell 4.6% over the month but was a substantial 115.2% higher than a year ago. Outside of energy products, particleboard and fiberboard prices rose 5.4% over the month and were up 13.9% from a year ago. Softwood veneer and plywood prices were up 3.6% over the month and 24.5% higher than a year ago.

Input Services

Prices for service inputs to residential construction rose 0.7% in October. On a year-over-year basis, service input prices were up 11.3%. 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 13.2% from a year ago. The price of transportation and warehousing services has risen 24.6% from a year ago, while prices for other services were up 3.0% over the year.