According to the latest Producer Price Index (PPI) report released by the U.S. Bureau of Labor Statistics, inputs to residential construction (commodity prices excluding food and energy) rose 0.19% in June. The index of inputs to residential construction (commodity prices excluding food and energy) represents the building materials used in residential construction. In May, the index fell 0.26% after rising 0.22% in April. For the year, the index rose 2.65% in June. Year-over-year growth continues this year, with June's increase being the highest since February 2023. While overall inflation is declining, prices of inputs to residential construction have accelerated since the start of the year, and homebuilders must continue to contend with rising building material prices.
The seasonally adjusted PPI for final goods decreased by 0.55% in June, following a revised decrease of 0.77% in May. The PPI for final energy and final food decreased by 2.64% and 0.33%, respectively. Final energy fell for the second consecutive month, following a 4.61% decrease in May. At the same time, the PPI for final goods excluding food and energy increased by a small margin of 0.02%. For the year, the index for final goods excluding food and energy increased by 1.81%.
The seasonally adjusted Producer Price Index for softwood lumber increased 3.41% in June after decreasing 5.00% in May. Softwood lumber prices are 7.41% lower than June 2023. Lumber prices remain lower than the highs and lows of 2020-2022, but higher than 2019, according to the index.
The seasonally adjusted producer price index for gypsum building materials remained flat for the second consecutive month, but increased 2.32% from a year earlier.
The seasonally adjusted PPI for ready-mix concrete increased 0.45% in June, following a revised increase of 0.26% in May. Compared to other building materials, ready-mix concrete continues to grow at over 5% year-over-year, a trend that has continued since the second half of 2021, with June 2024 prices up 6.51% compared to 2023.
The seasonally adjusted producer price index for iron and steel products fell 1.18% in June after rising 0.54% in May. Compared to the same month last year, iron and steel product prices have fallen year-on-year for four consecutive months, down 15.01% from June last year. This is the largest year-on-year decline since August 2023, when the index fell 16.09%.
The non-seasonally adjusted Specialty Commodity Group Producer Price Index for copper fell 2.67% in June, its first monthly decline since February of this year. For the year, the index increased 12.64%.
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