the Bureau of Labor Statistics (BLS) released its Producer Price Index report for April 2022. It said prices for building materials rose 0.8% in the month, seasonally adjusted. The index was 21.2% higher than its level a year earlier.
Overall prices for processed goods for intermediate demand rose 2.2% during the month. This index was 21.9% higher than its level a year ago.
For reference, the changes in these indexes can be compared to an 8.3% increase in the all-items index. consumer price index (CPI-U) for the 12 months ending in April. CPI-U rose 0.3% for the month. Housing’s share of the CPI rose 5.1% from its level a year ago.
Yield Pro has compiled the price changes reported by the BLS for our standard list of building products. These are raw materials whose prices directly impact the construction cost of an apartment building. The two columns on the right of the table show the percentage change in price of the product from the previous year (12MB PC Change) and the percentage change in price from March 2022 (1MB PC Change). If no price data is available for a given product, the change is indicated as N/A.
The pre-COVID column lists the change in current commodity prices compared to the average price from December 2019 to February 2020, before the pandemic affected the economy. This may give a more accurate picture of the magnitude of recent price increases for raw materials, such as lumber, whose prices have already risen sharply last year, than does the 12MB PC Change column.
|Commodity||12 MB Change of PC||1 MB Change of PC||Pre-covid change|
|Soft plywood products||10.4||-0.8||175.3|
|Hot rolled steel bars, sheets and sections||33.3||1.1||72.7|
|copper wire and cable||14.7||1.7||42.6|
|Power wire and cable||33.8||-0.4||65.8|
|Plumbing fixtures and fittings||11.0||0.2||14.6|
|Sanitary ware in enameled iron and metal||6.5||2.5||11.4|
|Furnaces and heaters||17.3||0.1||23.6|
|Sheet metal products||28.5||1.2||43.1|
|flat glass||N / A||N / A||N / A|
|Roofing and asphalt coating||20.9||0.9||29.7|
|Mineral wool insulation||32.4||9.3||43.3|
The first chart below shows the history of the Wood Products Price Index over the past 37 months. Note that the prices used by the BLS to compile the indices are taken on the Tuesday of the week containing the 13and day of the month. In April 2022, it would have been April 12.
In April, the highly volatile softwood lumber price fell by the largest percentage of any building material price we track. In addition, the period from April to June of last year was one when softwood lumber prices were exceptionally high. This high basis for comparison contributed to a reported decline in the price of softwood lumber for the year, despite the price doubling from its pre-pandemic level.
the timber market price hit a recent high of $1,464 on March 3 before declining through mid-April. However, the price has generally risen since then, closing at $1,007 on May 11. This represents an increase of $133, or 15%, since our last report. The prices of wood in the futures markets surged and then declined over the past month, leaving them close to the levels they started at. The July 2022 contract closed at $783 on May 11. The September 2022 contract was at $770, up $5 from last month.
In April, prices for flexible plywood products would have increased by 0.2%, although the rise would have been 0.5% without the revision to the March price level. Flexible plywood prices are up 175% from their level around January 2020, by far the largest increase of any building material price we track.
Prices for general millwork and hardwood lumber continue to rise steadily, in line with the overall rise in building material prices.
The following chart below shows the recent history of several other building materials prices. These are relatively simple raw materials whose prices are strongly influenced by those of the materials that compose them.
This month, prices for many metal-based building materials rose at a more moderate pace. The price of hot-rolled steel bars would have fallen and the price of copper wire would have registered a smaller increase, except for the downward revisions made to prices last month. However, the price of nails jumped 5.1% during the month. This increase would have been 5.7% without the revision made to the price level of the previous month.
MarketWatch Reports that the US NYSE Steel Index has generally trended lower since our last report. It closed on April 13 at $1,639, down $405 from its level a month ago. Steel Futures have also declined over the past month. The July 2022 contract closed on May 11 at $1,105, down $235 since we last reported on it. The September 2022 contract is at $1,071.
the copper price peaked shortly after the invasion of Russia, reaching $4.94 per pound on April 4. However, it has been trending lower since April 18 and it closed on May 11 at $4.21.
the aluminum price rose steadily from last December, hitting a high of $3,849 on March 4. It has been trending lower since March 23 and closed May 11 at $2,778. This is down $470, or 14%, from its level a month earlier.
Although not included in the chart, the price of mineral wool insulation jumped in April, posting the largest monthly price increase of any building material on our list.
The price variations of several of the most finished products in our sample are illustrated in the final table below. The table above indicates that major appliances saw the largest price increase during the month. However, compared to the unrevised price reported for March, electrical lighting fixtures saw the largest increase, up 4.1%, followed by plumbing fixtures and fittings, whose prices rose 3.6%. %.
The full BLS report can be found here.