Prices paid for goods used in residential construction decreased 4.1% in April (not seasonally adjusted) — the largest monthly decline on record — according to the latest Producer Price Index (PPI) report
released by the Bureau of Labor Statistics. The year-to-date decline (-5.4%) in residential construction inputs prices is more than three times larger than the previous record (-1.3% in 2009).
Price changes for key materials
Prices paid for gypsum products decreased 1.3% in April (seasonally adjusted) after climbing 2.2% in March. Gypsum product prices have declined 4.4% year-to-date, the largest January-to-April decrease since seasonally adjusted data became available in 2012. Prices are down 9.5% from the most recent peak in March 2018.
Although the PPI report shows that softwood lumber prices declined 10.8% (seasonally adjusted) in April, the decrease is at odds with recent prices reported by Random Lengths. According to their weekly data, prices fell a more modest 2.7% over the month.
The discrepancy between the BLS and Random Lengths data stems from known differences in survey timing. NAHB economists anticipated this in last month’s PPI post
, stating that the decline over the last 10 days of March "should be captured in next month’s PPI report."
Prices paid for ready-mix concrete (RMC) decreased 0.4% in April (seasonally adjusted), following a 0.7% increase in March. The RMC index has increased 1.1% year-to-date, which is close to the historical average year-to-date price change in April.
NAHB economist David Logan provides further analysis in this Eye on Housing blog post.