US prices for building materials fell 0.3% in September (not seasonally adjusted) according to the latest Producer Price Index (PPI) report. The PPI for goods entering residential construction, including energy, fell for the third consecutive month in September (-0.1%). Prices have fallen 2.3% since June, the biggest three-month drop since April 2020, according to the National Association of Home Builders (NAHB).
The residential construction services input price index fell 0.8% in September, driven by lower markups for building material wholesalers and freight transportation prices. Services prices have fallen each of the past six months by a combined 12.4% and are at the lowest level since 2021. Despite the six-month decline, the PPI for services inputs in residential construction is 3 higher, 3% to what it was in September 2021.
The softwood lumber PPI (seasonally adjusted) fell 2.9% in September after dropping 5.2% in August. Softwood lumber prices are 14.5% higher than a year ago, but have fallen 39.6% since March. The index remains 41.9% above pre-pandemic levels.
The PPI for ready-mixed concrete (RMC) rose 1.4% in September – its sixth straight increase – and has risen 11.6% over the past year. The index is up 8.9% year-to-date, the biggest year-to-date increase in September in the series’ 34-year history.
Gypsum building materials
The PPI for gypsum building materials edged down 0.2% in September, only the second monthly decline in two years. Prices have risen 20.2% over the past year and 46.0% since January 2020.
The price of freight trucking fell 0.4% in September after dropping 1.9% in August. Prices have fallen 3.1% over the past four months, led by a 4.5% drop in the price of long-distance car transport. Over the same period, the PPI for local automobile transport increased by 1.4%.