Building Materials Prices Move Lower in March

Filed in Economics, Home Building by on April 22, 2015 3 Comments

The Bureau of Labor Statistics has released the Producer Price Indexes for March, reporting that inflation in prices paid by producers (prior to sales to consumers) increased 0.2% after a string of monthly declines.

The uptick was led by higher prices for energy, mainly gasoline. Prices for services rose 0.1%. Rising energy prices and any indication of positive inflation will be welcome developments at the Federal Reserve as deliberations over monetary policy continue.blog-ppi-2015_04

As NAHB Senior Economist Robert Denk reported in a recent Eye on Housing blog post, the report was good news with respect to building materials, as prices for gypsum and wood products declined in March. Softwood lumber prices declined 1.6% in March, following the same decline in February.

Analysts at Random Lengths attribute the decline to an oversupplied market, citing a strong dollar, weak demand from China and disruptions at West Coast ports. Prices have declined enough since the beginning of 2015 to trigger the tariffs and quotas outlined in the U.S.-Canadian Softwood Lumber agreement for the first time since mid-2013. See a Random Lengths timeline of the U.S.-Canada trade dispute.

Prices for OSB continued their slide, declining 0.3% in March and contributing to the reversal of most of the sharp run-up from 2012 and early 2013. The PPI for OSB indicates a 46% decline from the price peak in March 2013.

Read more in Denk’s blog post.

 

 

 

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  1. Duke Geraghty says:

    Received memo from building supply that vinyl siding and related products will be increasing 7-10% next month. Asphalt roofing will also be rising 10%. They blame the increase that manufacturers have not been the beneficiary of the reduction in oil prices which I find hard to believe. Then add the increase in water heaters due to new EPA regulations. Drywall and mud are at or close to record highs and I find it hard to believe that building supply prices are decreasing. I do not see it for small builders and remodelers who purchase materials one job at a time and are not able to make purchases months in advance. DG

  2. Julie Myers says:

    I have been looking to get a house built, and I was hoping to wait until building supplies were at a good price. It looks like they were looking really good in March, and it looks like they were also declining in February. It would be interesting to look at a chart showing the last couple of months, just to see where we are at. If I could get the supplies for the prices that you show here, I am sure that would be really great to help me stay in budget for my house!

  3. Westly Smith says:

    I am glad to see that building material prices dropped in March. I hope they keep dropping so that I can get a lot for the new project that I’m going to be starting. I’m planning on constructing a garage in my backyard! Hopefully, I’ll be able to get these materials at a cheap price!

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