According to the latest Producer Price Index report, the prices of inputs to residential construction less energy (i.e., building materials) climbed 0.3% in March 2023 (not seasonally adjusted). Since declining the last four months of 2022, the index has increased three consecutive months by a total of 1.6% but has been relatively stable over the past year.
The prices of goods inputs to residential construction, including energy, gained 0.1% over the month as a 6.4% decrease in energy prices offset increases in other product categories.
As the shortage of distribution transformers continues, the PPI for power and distribution transformers increased 2.0% in March. Prices have surged 63.9% over the past two years and declined in just two months over that span.
The trend of ready-mix concrete (RMC) prices continued its historic pace as the index increased 0.7% in March after gaining 0.9% and 0.6% in January and February, respectively. RMC prices have increase 13.1% over the past 12 months and 24.2% since January 2021.
The monthly increase in the national data was broad-based geographically but was primarily driven by prices in the Northeast (+1.7%). Prices climbed 0.6% in the West, 0.9% in the South, and were unchanged in the Midwest.
The PPI for softwood lumber (seasonally adjusted) fell 4.0% in March–the eighth consecutive monthly decline. Since peaking in March 2022, the index has fallen by more than half (-52.5%) and is now just 11.5% above the January 2020 level.
Gypsum Building Materials
The PPI for gypsum building materials decreased 0.1% in March after increasing 0.4% the month prior. Gypsum building materials prices are 11.8% higher than they were a year ago but began stabilizing in September 2022. Prices have been stable—up just 0.2%–in the six months since.
Steel Mill Products
Steel mill products prices increased 1.2% in March after climbing 2.5% in February. This was the second monthly price increase since May 2022. Even so, prices have dropped 25.2% since May 2022 and are down 15.1% over the past 12 months.
The price index of services inputs to residential construction decreased 0.8% in March, following a 0.6% decline in February. Prices have declined 15.2% over the past year but are 23.2% higher than the pre-pandemic level at the start of 2020.
Transportation of Freight
The price of truck, deep sea (i.e., ocean), and rail transportation of freight decreased 2.9%, 0.4% and 0.2%, respectively, in March. Of the three modes of shipping, trucking prices have declined the most over the past 12 months, down 6.8%. Over that period, long-distance and local truck freight prices have fallen by 8.0% and 2.4%, respectively.–DAVID LOGAN