Is Inflation Cooling? Building Material Prices Indicate Yes
Continuing a trend of slowing price growth that began in 2022, overall prices of building materials were unchanged in June, according to the latest Producer Price Index (PPI) report. The index has gained 0.5% year to date and has not increased 1% or greater in any month since March 2022.
The PPI for all final demand goods was unchanged in June following a 1.6% decline in May (seasonally adjusted). The index has declined 0.2% from a year ago, while the PPI for final demand goods less food and energy has increased 2% (not seasonally adjusted).
Gypsum Building Materials:
PPI fell 0.3% in June after declining 1.1% in both April and May.
Steel Mill Products:
- Steel mill product prices were spared in June, declining 0.6% after a four-month period during which prices climbed 12.4%.
- PPI for softwood lumber (seasonally adjusted) increased 3.9% in June – the second increase over the past three months.
- Prices increased 0.5% in June.
- The PPI has risen each of the last 15 months, 27 of the last 30, and has climbed 12.3% over the past year. However, price growth slowed 0.8 percentage point over the month.
- The average monthly increase declined from 1% in 2022 to 0.7% in 2023.
- The price of truck and rail transportation of freight decreased 2.1% and 0.4% respectively in June while the PPI for deep sea (i.e., ocean) freight increased 0.4%.
- Trucking freight prices declined 13.7% over the past year with both long-distance (-15.1%) and local (-9.2%) motor carrying prices falling 92% and 4.1%, respectively.
David Logan, NAHB director of tax and trade policy analysis, provides more in this Eye on Housing post.