The prices of inputs to residential construction remained relatively stable in March, climbing 0.3% month over month. Since declining in each of the last four months of 2022, the Producer Price Index (PPI) has increased by a total of 1.6% in 2023. However, despite overall stability in the PPI, shortages of both concrete and transformers increased prices for both categories, according to an analysis by the NAHB.
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 increased 13.1% over the past 12 months and 24.2% since January 2021.
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.
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