Cost of Building Materials Increased Overall in February 2018

The indexes for softwood lumber, gypsum products, OSB, ready-mix concrete, and inputs to residential construction less labor all increased from between 0.4 percent (concrete) to 5.6 percent (softwood lumber).

The latest Producer Price Index (PPI) data from the Bureau of Labor Statistics showed that the percentage increase in softwood lumber prices, not seasonally adjusted, was the biggest since 2012. Gypsum also saw a marked seasonally adjusted price increase, 4.2 percent, in February 2018, which was the largest increase since April 2016, the National Association of Home Builders' Eye on Housing reports.

The increase in OSB prices follows a two-month, 22.9 percent decrease (NSA). After the brief reprieve, however, OSB prices in February 2018 are now 35.0 percent higher than they were two years prior. Due to methodology, OSB and softwood lumber data in the PPI tend to lag market conditions. According to Random Lengths, the price of OSB has risen more in recent weeks than PPI data suggest. These increases will likely be captured in next month’s PPI release.

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