The producer price index (PPI) report from the Bureau of Labor
Statistics (BLS) stated that construction materials prices rose
0.2 percent month-over-month in May on a seasonally adjusted
basis. The index of components and materials for construction
was up 1.9 percent from its year-earlier level.
Overall prices for processed goods for intermediate demand were
up 0.1 percent for the month. The largest gain was again for
materials for durable manufacturing, which rose 2.2 percent. The
volatile price index of processed fuels and lubricants fell
again this month, dropping 1.2 percent. The overall processed
goods for intermediate demand index was 1.9 percent higher than
its year-earlier level.
For reference, the changes in these indexes compare with a 0.1
percent month-over-month rise and a 2.4 percent year-over-year
rise in the seasonally adjusted all-items consumer price index
(CPI-U) in May.
Yield Pro compiled the BLS reported changes for our standard
list of construction materials prices. These are prices of
materials which directly impact the cost of constructing an
apartment building. The first two right hand columns of the
table provide the percent change in the price of the commodity
and the percent change in price from April (1 Mo PC Change) and
from a year earlier (12 Mo PC Change). If no price data is
available for a given commodity, the change is listed as N/A.
The pre-COVID column lists the change in the current
construction materials prices relative to the average of prices
from December 2019 through February 2020, before the pandemic
impacted the economy. This provides a longer-term view of
construction materials price trends.

The prices used by the BLS in compiling the indexes are
collected on the Tuesday of the week containing the 13th day of
the month. In May that would have been May 13. In the June
report, the data collection date will be June 10.
The first chart, below, shows the price index history for wood
products over the past 37 months.

The softwood lumber price index continued its recent downward
trend in May. However, its 9.1 percent rise for the year is the
largest year-over-year increase of the construction materials
prices that we track.
Last month’s soft plywood price index was revised 1.5 percent
lower this month. Therefore, while its price index was reported
to have risen this month, it is actually lower than the value
reported last month by 1.2 percent.
The next chart, below, shows the recent history of several other
construction materials prices. These are relatively simple
commodities whose prices are strongly driven by those of the
materials of which they are comprised.

The prices of metals have been volatile recently and that has
been reflected in the indexes of this group of construction
materials prices that we track.
The price index for hot-rolled steel bars had the second largest
upward move this month, behind only asphalt roofing and siding.
In addition, last month’s hot-rolled steel bar price index was
revised higher by 0.4 percentage points, so the index was up 3.2
percent from the preliminary value reported last month.
Last month, the price index for copper wire was reported to have
the largest gain of the construction materials prices we track.
This month it was reported to have the second largest decline.
The price index for power wire has, which had been rising
recently, took a small step back this month. It was down 0.1
percent on top of a 0.1 percentage point downward revision to
last month’s index value.
Price changes for several of the more finished goods from our
sample are illustrated in the final chart, below.

These construction materials prices have been sticky recently.
They may go several months with little or no changes and then
make a sudden jump. Only two of these construction materials
price indexes showed movement in May.
The price index for plumbing fixtures and fittings rose 1.1
percent. This followed last month’s 1.3 percent rise. However,
these rises followed the January through March period in which
the price index was unchanged.
The price index for major appliances was up 0.6 percent for the
month. It has now risen 1.1 percent over the last two months,
but is only up 0.9 percent year-over-year.
The full current BLS report
can be found here.
Source: Yield PRO