The producer price index (PPI) report from the Bureau of Labor Statistics (BLS) stated that construction materials prices rose 0.3 percent month-over-month in October on a seasonally adjusted basis. However, the change in construction materials prices for September was revised 0.1 percentage point lower. September’s prices are now listed as being unchanged for the month. The index of components and materials for construction was up 1.0 percent from its year-earlier level.
Overall prices for processed goods for intermediate demand were up 0.5 percent for the month. The volatile prices of processed fuels and lubricants rose 1.2 percent. The overall processed goods for intermediate demand index was 1.2 percent lower than its year-earlier level.
For reference, the changes in these indices compare with a 2.6 percent rise in the all-items consumer price index (CPI-U) for the 12 months ending in October.
Yield Pro compiled the BLS reported changes for our standard list of construction materials prices. These are prices of materials which directly impact the cost of constructing an apartment building. The first 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 September (1 Mo PC Change). If no price data is available for a given commodity, the change is listed as N/A.
The pre-COVID column lists the change in the current construction materials prices relative to the average of prices from December 2019 through February 2020, before the pandemic impacted the economy. This provides a longer-term view of construction materials price trends.
| Commodity | 12 Mo PC Change | 1 Mo PC Change | Pre-covid Change |
| Softwood lumber | 2.7 | 1.6 | 16.6 |
| Hardwood lumber | 7.3 | 0.0 | 30.8 |
| General millworks | 2.8 | 0.5 | 31.7 |
| Soft plywood products | (10.5) | 0.2 | 61.8 |
| Hot rolled steel bars, plates and structural shapes | (9.4) | (1.3) | 39.0 |
| Copper wire and cable | 14.4 | 3.4 | 45.4 |
| Power wire and cable | 0.4 | (0.4) | 130.5 |
| Builder’s hardware | (0.6) | 0.0 | 24.8 |
| Plumbing fixtures and fittings | 1.8 | 0.0 | 19.8 |
| Furnaces and heaters | 0.4 | (0.1) | 37.2 |
| Sheet metal products | 0.6 | (0.3) | 47.2 |
| Electrical Lighting fixtures | 1.5 | 0.0 | 19.9 |
| Nails | (4.2) | (0.7) | 18.1 |
| Major appliances | (0.6) | 0.1 | 21.6 |
| Flat glass | 4.8 | 0.6 | 35.0 |
| Ready mix concrete | 3.7 | 0.2 | 37.1 |
| Asphalt roofing and siding | 3.2 | 2.7 | 45.4 |
| Gypsum products | 4.7 | (0.1) | 47.7 |
| Mineral wool insulation | 8.1 | (0.4) | 50.8 |
| CPI-U (unadjusted) | 2.6 | 0.1 | 22.4 |
The prices used by the BLS in compiling the indexes are collected on the Tuesday of the week containing the 13th day of the month. In September that would have been September 15. In the October report, the data collection date will be October 12.
The first chart, below, shows the price index history for wood products over the past 37 months.
After reaching a recent low in July, softwood lumber price index climbed again this month, rising 1.6 percent. It is now up 7.2 percent since July.
The price of soft plywood products also moved higher again this month, rising 0.2 percent. It is up 5.1 percent from its recent low, which was also in July.
The next chart, below, shows the recent history of several other construction materials prices. These are relatively simple commodities whose prices are strongly driven by those of the materials of which they are comprised.
The price index for copper wire rose again this month, climbing for the second month in a row after 3 months of declines. Its 3.4 percent monthly price gain and 14.4 percent year-over-year price gain are the largest of any of the construction materials prices that we track.
The price index for power wire and cable fell this month on top of a slight downward revision to last month’s index. While the rise in this price index since the end of 2019 is by far the largest of any of the construction materials prices that we track, it has risen only slightly over the last year.
The price indexes for nails and for hot rolled steel bars moved lower this month, continuing long-term trends.
Price changes for several of the more finished goods from our sample are illustrated in the final chart, below.
The price index for plumbing fixtures and fittings extended its streak of being quoted as being exactly the same for 5 months in a row.
The price indexes for the other goods included in this chart were very stable again this month with only that for major appliances changing as much as 0.1 percent for the month.
The full current BLS report can be found here.
