Residential Construction Inputs Continue to Rise at the End of 2021
The latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics shows a 1.8% increase in prices of goods used in residential construction during the month of November. On the contrary, the price index for service inputs used in the residential construction sector fell 0.8% for the fourth month in a row, according to NAHBNow.
Seasonally adjusted rates for softwood lumber were up 6.9% in November with another sizable gain on the horizon in December. Steel mill products, ready-mix concrete, and paint prices all rose in November, though gypsum products declined for only the second time in 2021 at a rate of -0.2% after steady gains over the past 12 months.
The PPI for all inputs to residential construction — a weighted average of goods and services, which increased 0.3% in November — has climbed 17.3% over the past 12 months and is 22.7% higher than its pre-pandemic level.
Specific product breakdowns include:
- Softwood lumber (seasonally adjusted) increased 6.9% in November and has gained 16.1% since September. The recent trend of mill prices suggests that the softwood lumber PPI is headed for another sizable gain in December. Visit nahb.org to see the latest framing lumber prices.
- Steel mill products prices rose 2.4% in November, the smallest monthly increase since May 2021. The last monthly price decrease in steel mill products occurred in August 2020, and the index has climbed 151.4% in the months since.
- Ready-mix concrete (RMC) gained 0.9% in November after increasing 0.1% in October. The index for RMC has risen 8.3% since January 2020 and 6.6% year to date — the largest year-to-date increase in November since 2005.