Building Material Prices Continue to Rise in March

According to the most recent Producer Price Index (PPI) report published by the U.S. Bureau of Labor Statistics, inputs to residential construction, goods less food and energy, increased for the fifth straight month. This index, for inputs to residential construction, goods less food and energy, represents building materials used in residential construction

Following a 0.54% increase in February and a 1.25% in January, the non-seasonally adjusted index increased 0.21% in March. The index continues to grow at a faster rate than 2023 as the average monthly change in 2023 was 0.15% while index increases slow. The index also increased for the first three months of 2024 mirrors previous years, showing consistent monthly increases for January, February and March. 2019 was the last time the index did not increase in the month of March. Though slightly lower than the February yearly increase of 2.23%, over the year, the index was up 2.22% in March.

According to Eye On Housing, The seasonally adjusted PPI for final demand goods decreased 0.12% in March, after increasing a revised 1.17% in February. The PPI for final demand energy fell 1.56%, final demand food rose 0.83% and final demand goods, less food and energy, rose 0.05%. Year-over-year, the PPI for final demand goods was up 0.87%.

The seasonally adjusted PPI for softwood lumber rose for the first time since July of 2023, up 1.90% in March from February. Softwood lumber prices were 6.76% lower in March 2024 when compared to 2023. This yearly decline was the 17th straight, as lumber prices in 2023 were much more stable than the prices between 2020 and 2022. Compared to March of 2020, the PPI for lumber was 5.98% higher in March of 2024.

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