Construction material prices rise more slowly in July

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construction materials

The Bureau of Labor Statistics (BLS) released its producer price index report for July. It showed that overall prices for processed goods for intermediate demand were unchanged from June but that they increased 6.8 percent from a year earlier. This compares with a 2.9 percent rise in the all-items consumer price index (CPI) in the last 12 months ending in June.

The BLS index of materials and components for construction fell 0.1 percent from June, 2018 but was 6.3 percent higher than a year earlier.

Multihousing Pro (MHP) compiled the BLS reported price changes for our standard list of construction commodities. These are commodities whose prices directly impact the cost of constructing an apartment building. The two right hand columns of the table provide the percent change in the price of the commodity from a year earlier (12 Mo PC Change) and the percent change in price from June, 2018 (1 Mo PC Change).

Our construction material prices generally rose less sharply in July than they did in June. Exceptions to this were oriented strand-board (OSB) and copper wire, which experienced large price increases in July. Soft plywood products and nails also experienced significant price increases. On the other hand, several of the construction material prices we track experienced declines, most notably softwood lumber which had experienced some of the most rapid price increases over the last 12 months.

Commodity 12 Mo PC Change 1 Mo PC Change
Softwood lumber 19.5 -2.5
Hardwood lumber 6.1 -1.9
General millworks 2.3 0.2
Soft plywood products 35.1 1.9
Waferboard and oriented strand-board (OSB) 20.2 7.0
Hot rolled steel bars, plates and structural shapes 18.1 0.5
Copper wire and cable 12.8 3.8
Power wire and cable 17.9 0.9
Builder’s hardware 1.5 0.4
Plumbing fixtures and fittings 2.9 0.0
Enameled iron and metal sanitary ware 1.7 0.0
Furnaces and heaters 4.8 0.9
Sheet metal AC ducts and stove pipe 0.2 0.0
Electrical Lighting fixtures 2.4 -0.3
Nails 17.3 2.0
Major appliances 3.1 -0.3
Flat glass 6.8 -0.8
Ready mix concrete 3.9 -1.5
Asphalt roofing and siding 6.9 -0.4
Gypsum products 4.1 1.3
Mineral wool insulation 1.6 -0.4

 

The chart below illustrates the price changes for softwood lumber, OSB and soft plywood over the past year and a half relative to their prices in January, 2017. The recent fall in the price of softwood lumber and the continued surge in the price of OSB are the most notable changes in this chart from the one published last month.

lumber price trends

The full BLS report can be found here.