The producer price index (PPI) report from the Bureau of Labor Statistics (BLS) stated that construction materials prices rose 0.2 percent month-over-month in December on a seasonally adjusted basis. The index of components and materials for construction was up 1.1 percent from its year-earlier level.
Overall prices for processed goods for intermediate demand were up 0.3 percent for the month. The volatile prices of processed fuels and lubricants rose 1.6 percent while the prices of materials for food manufacturing were up 0.7 percent and prices for components for durable manufacturing were down 0.9 percent. The overall processed goods for intermediate demand index was 0.2 percent higher than its year-earlier level.
For reference, the changes in these indices compare with a 2.9 percent rise in the all-items consumer price index (CPI-U) for the 12 months ending in December.
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 November (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 | 12.9 | 1.1 | 22.0 |
| Hardwood lumber | 1.5 | 0.0 | 30.5 |
| General millworks | 2.5 | (0.1) | 31.6 |
| Soft plywood products | (9.2) | (0.3) | 61.4 |
| Hot rolled steel bars, plates and structural shapes | (4.9) | 1.6 | 43.5 |
| Copper wire and cable | 7.5 | (2.3) | 39.1 |
| Power wire and cable | 1.1 | (0.7) | 130.3 |
| Builder’s hardware | (0.6) | 0.0 | 24.8 |
| Plumbing fixtures and fittings | 1.8 | 0.0 | 19.8 |
| Furnaces and heaters | 0.5 | 0.0 | 37.2 |
| Sheet metal products | (0.2) | (0.5) | 46.0 |
| Electrical Lighting fixtures | 1.5 | (0.0) | 19.9 |
| Nails | (4.0) | 0.1 | 18.4 |
| Major appliances | (2.7) | (1.6) | 19.3 |
| Flat glass | 3.7 | 0.7 | 34.8 |
| Ready mix concrete | 5.1 | (0.3) | 37.5 |
| Asphalt roofing and siding | 1.6 | (0.1) | 42.9 |
| Gypsum products | 5.4 | 0.0 | 48.3 |
| Mineral wool insulation | 7.5 | (0.1) | 50.5 |
| CPI-U (unadjusted) | 2.9 | 0.0 | 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 December that would have been December 10. In the January report, the data collection date will be January 14.
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 prices have been on the rise recently. They rose again in December and now have the largest year-over-year increase of the construction material prices we track. However, the increase in softwood lumber prices since immediately before the pandemic has actually been less than that of the CPI-U.
The soft plywood prices fell slightly this month, although this fall was aided by a 0.8 percent upward revision to its level of the month before. This price index is below its level in the several years leading up to May 2024.
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.
Last month’s price index for hot rolled steel bars had the largest revision in this month’s report. It was reported to be 3.5 percent higher than originally reported last month. This month’s 5.2 percent rise compared to last month’s original report is by far the largest rise of the construction materials prices we track.
The price index for copper wire has now fallen for two consecutive months. However, it is still higher it was as recently as March.
The price index for power wire and cable was also reported to fall this month, extending its series of declines to 4 months in a row. However, its price index has still experienced the greatest increase by far over the last 5 years.
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 has now been reported to be exactly the same for 7 consecutive months while that for furnaces and heaters has been reported to be exactly the same value for 3 consecutive months. It seems as if the BLS is now only updating these indexes periodically, although they have not issued a note to that effect.
The other indexes illustrated in the chart have also been very stable recently, although not unchanged. Only the index for major appliances made a significant move this month, falling 1.6 percent.
The full current BLS report can be found here.
