Some Construction Materials Prices Show a Reprieve From the Surge

A reduction in steel and gypsum product prices helped slow the steady gains in construction materials costs last month, according to the Bureau of Labor Statistics.

Even still, overall, prices climbed 1.6% for the month, according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. Building material prices increased 20.4%, year over year and have risen 31.3% since January 2020.

The biggest drop was in steel products, according to an analysis by the National Association of Homebuilders. 

Steel mill products prices declined 9.9% in February, the second consecutive decrease after increases in each of the prior 15 months. The last time the steel mill products PPI decreased more than 9 percent was December 2008, NAHB said. However, the PPI remains 74.4% greater than it was 12 months ago.

Gypsum products also posted a decline in price, dropping 1.9% in February, snapping an 11-month streak of increases during which the index climbed 31.4%. Gypsum products prices are up 20.7%, year over year.

At the same time, the PPI for softwood lumber increased 2.6% in February following a combined 28.9% increase over the two months prior. Since reaching its most recent trough in September 2021, prices have increased 79.5%.  According to Random Lengths data, the “mill price” of framing lumber has more than tripled since late August.

Also, the PPI for ready-mix concrete gained 0.8% in February after increasing 1.1% in January. The index for ready-mix concrete has been relatively volatile since mid-2020 and has climbed 8.2%, year over year. Prior to January 2021, year-over-year price increases had not exceeded 8% since December 2006.