Overall construction input prices are 2.3% higher than a year ago, according to the most recent producer price index (PPI) report published by the U.S. Bureau of Labor Statistics (BLS).

April's PPI marked the sixth consecutive month of increases for residential construction input prices, according to analysis by the NAHB. The nonseasonally adjusted PPI increased 0.14% in April after increases of nearly 50 basis points in March and February.

“Construction input prices jumped half a percentage point higher in April and have increased 3.5% over the first four months of the year,” Associated Builders and Contractors chief economist Anirban Basu said in the organization’s analysis of the PPI report. “While iron, steel, asphalt, and gypsum product prices fell in April, oil and copper prices surged, driving the monthly increase. Rising input prices will put pressure on profits at a time when nearly 1 in 4 contractors expect margins to contract over the next two quarters, according to ABC’s Construction Confidence Index.”

The seasonally adjusted PPI for final demand increased 2.18% from last year, the largest yearly increase since April 2023, according to the NAHB. Nearly three-quarters of the April increase in final demand prices is attributable to an increase in the index for final demand services, according to the BLS.

“Perhaps more importantly for contractors, the overall PPI reading for final demand goods and services increased 0.5% in April,” said Basu. “This is yet another sign that inflation is accelerating and suggests that interest rates are set to stay higher for longer.”

The seasonally adjusted index for softwood lumber increased 6.2% in April, the largest month-over-month increase since January 2022. On a year-over-year basis, the PPI for softwood lumber was 4.31% lower than 12 months ago. The nonseasonally adjusted PPI for gypsum fell 0.74% in April. Prices for gypsum are 1% higher compared with April 2023.