The price level of inputs to residential construction less energy (building materials) increased 0.1% in August, according to the latest Producer Price Index (PPI) report. Overall construction input prices increased 1.5% on a month-over-month basis.
Residential building material prices have increased 0.2% over the past 12 months, with year-over-year price growth slowing from recent peaks of 4.9% in January 2023 and 14.7% in August 2022. According to an analysis by the NAHB, the 12-month increase in August is the smallest since June 2016.
In an analysis of the PPI, Associated Builders and Contractors chief economist Anirban Basu said the PPI, coupled with the consumer price data report earlier this week, served notice that inflation remains a concern and “price growth continues to be problematic.”
“With labor costs still rising, consumers spending aggressively, oil-producing nations limiting output, and global supply chains being reorganized, there is reason to believe that future readings will also demonstrate excess inflation is here to stay,” said Basu.
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