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Building a Common Ground

build homeThe price of building materials can’t seem to find a common ground, according to the National Association of Home Builders (NAHB), which compiled the prices of softwood lumber, oriented strand board (OSB), gypsum, and ready-mix concrete in a recent June release.

Softwood lumber prices dropped 3 percent, according to the Producer Price index. This is the first time in seven months that the price of softwood lumber fell, and is the largest drop in percentage points since September 2016.

One interesting thing about this, reports the NAHB, is that it doesn’t match up with their own data on softwood lumber prices, which showed a drop in price of approximately 1 percent. They attribute this anomaly to two factors: the time between different reports in PPI data, and the different goods included in the specific index.

Further, the NAHB’s reported decline is consistent with the Random Lengths Lumber Composite Price (FLCP), which fell 1.3%. They report that if the trend continues, July’s PPI report will correct itself and show an increase in prices.

Oriented strand board fell by a marginal amount—0.4 percent. It was the first time since OSB fell in price since December 2016, when they dropped 0.5 percent. The price index, however, on a year-over-year margin, remains 20.9 percent higher, and has risen 15.2 percent from the beginning of 2017 to the end of May.

Gypsum prices, conversely, have increased 1.3 percent after making a small decline a month prior, where they fell 0.2 percent and have since stabilized. Gypsum prices have fluctuated as much as 10 points.

The seasonally-adjusted price of ready-mix concrete also increased in June by 0.4 percent, which is in line with its average since 2000, during which time prices increased by 0.3 percent in almost every month.

The economy-wide PPI saw some movement in June (0.1 percent) after staying stagnant a month prior.

About Author: Joey Pizzolato

Joey Pizzolato is the Online Editor of DS News and MReport. He is a graduate of Spalding University, where he holds a holds an MFA in Writing as well as DePaul University, where he received a B.A. in English. His fiction and nonfiction have been published in a variety of print and online journals and magazines. To contact Pizzolato, email joseph.pizzolato@thefivestar.com.

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