Driven by lower lumber and concrete product prices, prices paid for goods used in residential construction decreased 0.8% in September, according to the latest Producer Price Index (PPI) from the Bureau of Labor Statistics. The PPI also showed the price of service inputs decreased in September, driven by smaller gross profit margins for building materials retailers. Even with the monthly decline, the National Association of Home Builders (NAHB) reports building materials prices remain 13.9% higher than in September 2020 and 11.3% higher than in January 2021.
The PPI for softwood lumber decreased 3.5% in September after declining over 27.0% in both July and August. Despite the declines, the Random Lengths Framing Lumber Composite Price for lumber has increased 36.0% since its most recent trough in August, suggesting the softwood lumber PPI will increase once again in October.
