07-19-23 | News

Building Material Prices Remain Stable in June 2023, According to Latest PPI Report

Price Growth Slows Down, Offering Some Relief to Residential Construction Industry
by Staff

The latest Producer Price Index (PPI) report reveals that the price level of building materials remained unchanged in June 2023, providing a momentary respite to the residential construction sector.

According to the latest Producer Price Index (PPI) report, all final demand goods remained unchanged in June, following a decline in May. The PPI for goods inputs to residential construction, including energy, has experienced a significant decrease of 3.6% over the past year, marking the largest decline since October 2009.

One notable observation in the report is the price fluctuation of various building materials.

Gypsum Building Materials declined by 0.3% in June, after experiencing substantial price increases in 2021 and 2022. However, the pace of growth has slowed down in recent months.

Steel mill product prices declined by 0.6% in June, offering relief after a four-month period of price increases. The index remains significantly lower than it stood a year ago. Softwood lumber prices increased by 3.9% in June, marking the second increase in the past three months. However, the index has witnessed a significant decline of 20.9% over the past year.

Ready-mix concrete prices rose by 0.5% in June, continuing a trend of consecutive monthly increases. Despite the overall price growth, the rate of increase has slowed down in 2023 compared to the previous year.

David Logan, NAHB director of tax and trade policy analysis explained, "The PPI report reflects the complex nature of the building materials market, with some materials experiencing price declines while others exhibit moderate growth. These fluctuations influence the overall costs and profitability of residential construction projects."


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