Building Material Costs Up in March, But Lumber Prices Soften

Inputs to residential construction, including building materials, increased for the fifth straight month according to the latest Producer Price Index (PPI) report by U.S. Bureau of Labor Statistics.

The index rose 0.21% in March, following larger increases in February (0.54%) and January (1.25%).

These increases are slower than the average monthly change in 2023 (0.15%) but still indicate a rising trend compared to previous years when March often saw no increase.

The seasonally adjusted PPI for final demand goods fell slightly by 0.12% in March, following a revised increase of 1.17% in February.

The PPI for final demand energy fell 1.56%, final demand food rose 0.83% and final demand goods, excluding food and energy, rose 0.05%. Year-over-year, the PPI for final demand goods was up 0.87%.

Softwood Lumber

The seasonally adjusted PPI for softwood lumber rose for the first time since July 2023, up 1.9% in March. However, lumber prices remain 6.76% lower compared to March 2023.

This is the 17th consecutive year-over-year decline, reflecting a return to stability after price fluctuations between 2020 and 2022.

Compared to March of 2020, the PPI for lumber was still 5.98% higher in March of 2024.

Other Building Materials

The unadjusted PPI for gypsum building materials rose for the second straight month, increasing 2.24% in March after a 2.95% increase in February.

The index reached a new high in March and was 1.33% higher than one year ago.

The seasonally adjusted PPI for ready-mix concrete continued to climb, rising 0.05% in March after a 0.84% increase in February.

Over the year, ready-mix concrete prices were 7.00% higher.

The unadjusted PPI for steel mill products dropped after rising for three straight months, declining 7.77% in March.

This was the largest month-over-month decrease since February 2022. Steel mill product prices were down 3.59% from March of 2023.

(Read more about this topic on Eyeonhousing.org)