The costs of products utilized in residential development climbed 1.5% in June (not seasonally adjusted) at the same time as softwood lumber costs fell 23%, based on the newest Producer Worth Index (PPI) report. Costs have surged 41.7% since January 2020. Constructing supplies (i.e., items inputs to residential development, much less power) costs have elevated 4.8%, year-to-date, and are 12.2% larger than they have been in June 2021.
The worth index of providers inputs to residential development was pushed 2.1% decrease in June after a 2.0% decline in Might (revised) by decreases within the constructing supplies retail and wholesale commerce indices. The providers PPI is 0.1% decrease than it was 12 months prior and 37.6% larger than its pre-pandemic stage.
The PPI for softwood lumber (seasonally adjusted) fell sharply (-22.6%) in June, its second such decline in three months. Costs have fallen 35.0% since March 2022, though the extent to which the lower has reached residence builders and remodelers is unclear.
Since early 2020, softwood lumber costs have been terribly unstable. The common month-to-month change within the PPI for softwood lumber has been 2.6% since January 2020, almost 9 instances the typical change (+0.3%) from 1947 to 2020. The volatility of softwood lumber costs has exhibited the identical sample relative to the “all commodities” PPI. Whereas lumber costs have been 19.7% extra unstable over the 1947-2020 interval, they’ve been 100.1% extra unstable than the broader index since January 2020.
The PPI for ready-mix concrete (RMC) gained 1.9% in June following will increase in Might (+0.8%) and April (+1.1%). The index has climbed 5.1%, year-to-date, and 11.3% over the previous 12 months. Over the twenty years starting January 2000, the value of RMC moved greater than 1% in 24 of 240 survey months. It has elevated/decreased greater than 1% in seven of the 30 months since, together with 3 times via the primary half of 2022.
Worth modifications have been broad primarily based geographically however elevated probably the most within the Northeast the place they rose 6.3% in June. Costs additionally elevated within the South (+0.9%), Midwest (+1.6%), and West (+1.0%). Though costs are larger than pre-pandemic ranges in all areas, the variance of will increase throughout areas is kind of massive, starting from 10.6% within the Midwest to 23.2% within the West.
The PPI for gypsum merchandise elevated 0.1% in June after surging 7.1% in Might. and has soared 22.6% over the previous 12 months. After a quiet 2020, the value of gypsum merchandise climbed 23.0% in 2021 and is up 7.6% via the primary half of 2022.
Metal mill merchandise costs decreased 1.8% in June after rising 13.6% over the 2 prior months. 10.7%. Though costs are 6.5% under their all-time excessive (reached in December 2021), they’re twice January 2021 ranges.
The PPI for architectural coatings (i.e., paint) was flat over the month as the value of exterior paint gained 0.1% and that of inside paint didn’t change. The PPI for paint has not declined since January 2021—the costs of exterior and inside paint have risen 49.3% and 33.2%, respectively, within the months since.
Transportation of Freight
The worth of truck transportation of freight decreased 0.4% in June, the primary month-to-month decline since Might 2020. Since then, the indices for native and long-distance motor carrying costs are up 31.0%% and 46.5%, respectively.
Water transportation prices declined 1.5% in June after rising 21.6% over the prior two months. Deep sea (i.e., ocean) transportation of freight costs—that are 27.2% larger than they have been in March—have accounted for a lot of the three-month enhance because the class accounts for over half of the water transportation PPI. The worth of deep sea water freight has climbed 57.8% because the spring of 2020.
Not solely have freight prices elevated, however the costs of providers to rearrange freight logistics have climbed steeply as properly. Over the course of 2021, the PPI for the association of freight and cargo elevated 95.1%. Though costs have fallen almost 12%, YTD, they continue to be 57.5% above pre-pandemic ranges.
Different Constructing Supplies
The chart under reveals the 12-month and year-to-date value modifications of different value indices related to the residential development trade.