Washington, D.C.—The prices of goods used in residential construction, excluding energy, climbed 1.6% in February (not seasonally adjusted), according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. Building material prices increased 20.4%, year over year, and have risen 31.3% since January 2020, according to the National Association of Home Builders (NAHB).
Increases were held in check by metal, gypsum and concrete products. Here is a breakdown by material:
Steel Products: Steel mill products prices declined 9.9% in February, the second consecutive decrease after increases each of the prior 15 months. The last time the steel mill products PPI decreased more than 9% was December 2008. While January and February have been good months for the cost of derivative steel products, the PPI remains 74.4% greater than it was 12 months ago.
Gypsum Products: The PPI for gypsum products declined 1.9% in February, snapping an 11-month streak of increases during which the index climbed 31.4%. Gypsum products prices are up 20.7%, year over year.
Ready-mix concrete: The PPI for ready-mix concrete (RMC) gained 0.8% in February after increasing 1.1% in January. The index for RMC has been relatively volatile since mid-2020 and has climbed 8.2%, year over year. Prior to January 2021, year-over-year price increases had not exceeded 8% since December 2006.
Paint: After a 12-month period during which the prices of exterior and interior paint increased 30.3% and 21.2%, respectively, paint prices held relatively steady in February. The prices of exterior architectural coatings gained 0.1% and interior architectural coatings PPI rose 0.3%.
Softwood lumber: The PPI for softwood lumber (seasonally adjusted) increased 2.6% in February following a combined 28.9% increase over the two months prior. Since reaching its most recent trough in September 2021, prices have increased 79.5%. According to Random Lengths data, the “mill price” of framing lumber has more than tripled since late August.