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HomeMacroeconomicsLumber Value Decline, Document-Setting Volatility Spotlight June PPI Report

Lumber Value Decline, Document-Setting Volatility Spotlight June PPI Report


The costs of products utilized in residential development climbed 1.5% in June (not seasonally adjusted) whilst softwood lumber costs fell 23%, based on the newest Producer Value Index (PPI) report. Costs have surged 41.7% since January 2020. Constructing supplies (i.e., items inputs to residential development, much less power) costs have elevated 4.8%, year-to-date, and are 12.2% greater than they had been in June 2021.

The value index of companies inputs to residential development was pushed 2.1% decrease in June after a 2.0% decline in Could (revised) by decreases within the constructing supplies retail and wholesale commerce indices. The companies PPI is 0.1% decrease than it was 12 months prior and 37.6% greater than its pre-pandemic stage.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) fell sharply (-22.6%) in June, its second such decline in three months. Costs have fallen 35.0% since March 2022, though the extent to which the lower has reached dwelling builders and remodelers is unclear.

Since early 2020, softwood lumber costs have been terribly risky. The typical month-to-month change within the PPI for softwood lumber has been 2.6% since January 2020, practically 9 instances the common change (+0.3%) from 1947 to 2020. The volatility of softwood lumber costs has exhibited the identical sample relative to the “all commodities” PPI. Whereas lumber costs had been 19.7% extra risky over the 1947-2020 interval, they’ve been 100.1% extra risky than the broader index since January 2020.

Prepared-Combine Concrete

The PPI for ready-mix concrete (RMC) gained 1.9% in June following will increase in Could (+0.8%) and April (+1.1%). The index has climbed 5.1%, year-to-date, and 11.3% over the previous 12 months. Over the 20 years starting January 2000, the worth of RMC moved greater than 1% in 24 of 240 survey months. It has elevated/decreased greater than 1% in seven of the 30 months since, together with thrice via the primary half of 2022.

Value modifications had been broad primarily based geographically however elevated probably the most within the Northeast the place they rose 6.3% in June. Costs additionally elevated within the South (+0.9%), Midwest (+1.6%), and West (+1.0%). Though costs are greater than pre-pandemic ranges in all areas, the variance of will increase throughout areas is kind of giant, starting from 10.6% within the Midwest to 23.2% within the West.

Gypsum Merchandise

The PPI for gypsum merchandise elevated 0.1% in June after surging 7.1% in Could. and has soared 22.6% over the previous yr. After a quiet 2020, the worth of gypsum merchandise climbed 23.0% in 2021 and is up 7.6% via the primary half of 2022.

Metal Merchandise

Metal mill merchandise costs decreased 1.8% in June after growing 13.6% over the 2 prior months. 10.7%. Though costs are 6.5% beneath their all-time excessive (reached in December 2021), they’re twice January 2021 ranges.


The PPI for architectural coatings (i.e., paint) was flat over the month as the worth of exterior paint gained 0.1% and that of inside paint didn’t change. The PPI for paint has not declined since January 2021—the costs of exterior and inside paint have risen 49.3% and 33.2%, respectively, within the months since.

Transportation of Freight

The value of truck transportation of freight decreased 0.4% in June, the primary month-to-month decline since Could 2020. Since then, the indices for native and long-distance motor carrying costs are up 31.0%% and 46.5%, respectively.

Water transportation prices declined 1.5% in June after growing 21.6% over the prior two months. Deep sea (i.e., ocean) transportation of freight costs—that are 27.2% greater than they had been in March—have accounted for a lot of the three-month improve because the class accounts for over half of the water transportation PPI. The value of deep sea water freight has climbed 57.8% because the spring of 2020.

Not solely have freight prices elevated, however the costs of companies to rearrange freight logistics have climbed steeply as nicely. Over the course of 2021, the PPI for the association of freight and cargo elevated 95.1%. Though costs have fallen practically 12%, YTD, they continue to be 57.5% above pre-pandemic ranges.

Different Constructing Supplies

The chart beneath reveals the 12-month and year-to-date value modifications of different value indices related to the residential development trade.

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