Residential building material prices in the US rose again in July, recording the largest year-on-year increase in more than two years, according to the latest Producer Price Index (PPI) from the Bureau of Labour Statistics. Inputs to new residential construction, excluding capital, labour and imports, rose 0.2% in July following a 0.8% rise in June, and are now 2.8% higher than a year earlier.
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The goods component of the index increased 2.4% annually, while services rose 3.3%. Certain categories saw sharp gains, with construction machinery parts and metal moulding/trim up more than 25% year-on-year. Copper wire and cable prices surged 5% in July and are now 12.2% higher than last year.
Not all materials followed the upward trend. Month-on-month declines were recorded in plywood (-0.6%), softwood lumber (-0.2%), paint materials (-0.5%), and cement and concrete products (both -0.2%). However, on an annual basis, softwood lumber rose 7.7%, hardwood 5.4%, and hardware 6.4%.
Associated Builders and Contractors noted construction input prices rose 0.4% in July and are up 2.2% year-on-year. Chief economist Anirban Basu warned that "trade policy will likely continue to put upward pressure on materials prices" and highlighted the risk of resurgent inflation influencing Federal Reserve interest rate decisions.
Source: www.globalwood.org
