According to the latest Producer Price Index (PPI) from the U.S. Bureau of Labor Statistics, prices for goods used in residential construction rose in January, driven by a 25.4% rise in softwood lumber prices and a 9% rise in interior and exterior paint prices.According to the NAHB, building materials prices rose 20.3% year-on-year and 28.7% since January 2020.
The PPI (seasonally adjusted) for softwood lumber rose 25.4% in January after rising 21.3% the previous month.Since reaching its most recent trough in September 2021, prices are up 73.9%.According to Random Lengths, “mill prices” for framing lumber have more than tripled since late August.
The PPI for most durable goods in a given month is primarily based on the price paid for goods shipped rather than ordered during the survey month.This could lead to a lag in prices relative to the spot market, which is why last month’s post noted that “another sharp rise in the softwood producer price index is likely in the [January 2022] PPI report.”
In January, the PPI for gypsum products rose 3.4%, the 11th consecutive month of gains.Gypsum prices have fallen only once since August 2020 and have since risen 31.4%.Gypsum product prices rose 23.0% year-on-year, the largest increase since data became available in 2012, and more than four times the 10-year average.
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