U.S. building material prices rose 0.4% in July 2022 (unadjusted) even as softwood lumber prices rose 2.3%, according to the latest report from the producer price index (PPI). Prices have jumped 35.7% since January 2020, although 80% of the increase has occurred since January 2021. The PPI for goods entering residential construction, including energy, fell by 1, 2%, with the prices of diesel No. 2 and unleaded gasoline falling by 16.6% and 16.7%, respectively, as the National Association of Home Builders (NAHB) reported.
The residential construction services input price index fell 1.4% in July – the third consecutive monthly decline – due to a 3.8% decline in the retail sales index of construction materials. The services PPI is 3.0% higher than 12 months ago and 34.9% higher than its pre-pandemic level.
The ready-mixed concrete (RMC) PPI gained 2.5% in July and has risen in 17 of the past 18 months. The latest increase is the largest since prices rose 3.7% in March 2006. The index has climbed 6.8% since the start of the year, the biggest increase since July in history of the series over 34 years.
Price changes were geographically widespread, but increased the most in the South where they rose 3.5%, unadjusted for seasonal variations. Prices rose 2.9%, 1.6% and 1.2% in the Midwest, West and Northeast regions, respectively.
Ready-mixed concrete is just one type of concrete product that has recently increased in price. The PPI for finished concrete products has climbed 14.4% over the past 12 months and the price of structural concrete blocks has increased 12.9% over the same period. Similarly, prices for concrete pipes and prestressed concrete products have climbed 21.0% and 29.9%, respectively, since July 2021.
The softwood lumber PPI (seasonally adjusted) edged up (+2.3%) in July, its second decline in three months. Prices have fallen 28.2% since the start of the year, although the extent to which the decline affected home builders and renovators is unclear.
Prices for steel products fell 3.7% in June after falling 1.7% in June from the previous two months. Although the index has fallen 10.1% since hitting its all-time high in December 2021, it is nearly double the level of January 2021.
The price of freight transportation by truck fell 0.3% in July. This is the second consecutive decline after two years of monthly increases. Over the past year, the local and intercity transportation price indexes have increased by 18.9% and 22.6%, respectively.
Not only have freight costs increased, but prices for freight logistics organization services have also risen sharply. During 2021, the PPI for freight and freight arrangement increased by 95.1%. Although prices have fallen 8.8% since the start of the year, they remain 63.0% above pre-pandemic levels.