June Price Index Data Show Building Material Price Growth Slowing
The latest Producer Price Index report shows prices declining for goods inputs to residential construction—another signal that inflation is cooling
July 17, 2023
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The June Producer Price Index (PPI) report from the U.S. Bureau of Labor Statistics shows price level of inputs to residential construction less energy (that is, building materials) remained unchanged in June 2023 (not seasonally adjusted). March was the last month this year in which prices increased, The National Association of Home Builders' Eye on Housing reports, and so far the index has gained 0.5% year-to-date.
In fact, the PPI for goods inputs to residential construction, including energy, declined 3.6% during the past 12 months—the largest 12-month decrease since October 2009—with June being the second consecutive month in which prices remained unchanged. Prices for steel mill products and gypsum building materials both dropped slightly in June, while the PPI for softwood lumber increased.
Ready-mix concrete (RMC) prices increased 0.5% in June. The PPI for RMC has risen each of the last 15 months, 27 of the last 30, and has climbed 12.3% over the past year. On a positive note, however, price growth slowed 0.8 percentage point over the month and the average monthly increase has declined from 1.0% in 2022 to 0.7% in 2023.
