Building material prices increased by 0.2% in July, continuing a steady trend of marginal growth in 2023, according to the latest Producer Price Index (PPI) report. Prices have averaged a monthly increase of 0.2% in 2023 after averaging 0.7% monthly growth in 2022 and 1.5% monthly growth in 2021.
ear-over-year, the index declined 2.5% while the PPI for final demand goods less food and energy increased 1.9% (not seasonally adjusted) with the disparity driven by a 16.8% decrease in energy prices.
The PPI for softwood lumber (seasonally adjusted) increased 8.6% in July—the third and largest increase over the past four months during which the index has climbed 16.4%. In contrast, the Random Lengths Framing Lumber Composite Price increased roughly 5% in July.
This difference results primarily from the seasonal adjustment of data. The unadjusted softwood lumber PPI increased 4.4% in July, in line with the Random Lengths data. These differences can be quite substantial.
Other causes of the difference include the timing of the PPI survey as well as the composition and weighting of the softwood lumber index.
