Construction Material Cost Increases Still Alarming

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Construction Material Cost Increases Still Alarming

Construction Material Cost Increases Still Alarming
Latest PPI Results Show Construction Material Cost Increases Still Alarming

Latest PPI Results Show Construction Material Cost Increases Still Alarming

For 15 of the most important building materials or construction-related inputs, Table 1 highlights year-over-year and latest-three-months’ price changes.

More than doubling in price over the past year have been softwood lumber, +154.3%; particleboard and OSB, +121.5%; regular gasoline, +151.9%; and diesel fuel, +199.2%.

With cost lifts lying between +50% and +99% are plywood, +98.4%; iron and steel scrap +76.6%; and asphalt, +62.3%.

Asphalt also has the distinction, however, of being one of only two items that experienced a price drop month to month in May, -13.8%. Coal, as a base material going into steel production, was the other, -0.3% m/m.

The most accessible single-source resource on construction material price movements is the Producer Price Index data set from the Bureau of Labor Statistics. The PPI series monitors prices charged by producers as they exit through factory gates.

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Latest PPI Results Show Construction Material

One drawback of a government statistical series, however, is that it will inevitably lag what is occurring in the real world, due to a time delay in collecting and tabulating results. For example, the latest PPI figures are for May. Therefore, they don’t factor in some of the decreases in final demand (e.g., some possible moderation in housing start activity) and increases in supply (e.g., more sawmill production of lumber) that may, according to ‘word of mouth,’ be taking place.

Nevertheless, the PPI numbers are the best that’s available and the remainder of this article showcases them in tables and charts.

For 15 of the most important building materials or construction-related inputs, Table 1 highlights year-over-year and latest-three-months’ price changes.

More than doubling in price over the past year have been softwood lumber, +154.3%; particleboard and OSB, +121.5%; regular gasoline, +151.9%; and diesel fuel, +199.2%.

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