Necessary materials such as softwood lumber, oriented strand board, and ready-mix concrete used in homebuilding aren’t getting cheaper, according to August’s Department of Labor’s Producer Price Index [1] (PPI).
Prices for softwood lumber rose for the second straight month, following a 3 percent decrease from May to June. Prices have steadily been climbing—from July to August they rose 2.5 percent, putting them near the annual peak recorded in May.
The price for oriented strand board rose 2.9 percent month-over-month, but as the National Association of Home Builders reports [2], this could be inconsistent due to the fact that the Labor Department’s numbers include waferboard, which could bring down the average. August marks the first time in three months that the price of oriented strand board has increased in value, and since the beginning of 2017 the price has increased 9.2 percent. From January 2016 to date, the price index has seen a rise of over 30 percent.
Seasonally adjusted, ready-mix concrete saw the smallest increase in price of a modest 0.5 percent, which is on par with its average monthly increase since the year 2000.
Gypsum was the only material that dropped in price, at a similar but opposite rate as ready-mix concrete: down 0.6 percent. However, due to the fact that it is one of the primary ingredients used to make plaster and stucco, experts believe this could be one of the first materials to be affected by the aftermath of Hurricane Harvey and Hurricane Irma.
On a national scale, PPI showed little movement from July to August, rising only 0.2 percent. From June to July, the national PPI dropped 0.1 percent.
To see the full PPI from the Labor Department, along with other economic factors, click here [1].