Prices for building materials have increased 35.7% since January 2020, with approximately 80% of the increase occurring since January 2021. Despite the strong increases since 2020 and 2021, building material prices rose only marginally, by 0.4%, in July, according to the Producer Price Index (PPI) from the Bureau of Labor Statistics. Prices for softwood lumber increased marginally year over year in July, while the prices for concrete products experienced their largest year-to-date increase in the history of the PPI, according to the NAHB.
The PPI for ready-mix concrete (RMC) gained 2.5% in July and has increased in 17 of the last 18 months. The latest increase is the largest since prices climbed 3.7% in March 2006. The index has climbed 6.8%, year-to-date, the largest YTD July increase in the series’ 34-year history.
The PPI for softwood lumber (seasonally adjusted) saw a modest increase (+2.3%) in July, its second decline in three months. Prices have fallen 28.2% year-to-date, although the extent to which the decrease has reached home builders and remodelers is unclear.
The price of truck transportation of freight decreased 0.3% in July, the second consecutive decline after two years of monthly increases. Over the past year, the indices for local and long-distance motor carrying prices are up 18.9% and 22.6%, respectively.
Not only have freight costs increased, but the prices of services to arrange freight logistics have climbed steeply as well. Over the course of 2021, the PPI for the arrangement of freight and cargo increased 95.1%. Although prices have fallen 8.8%, YTD, they remain 63.0% above pre-pandemic levels.
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