Producer Prices in March – Building Materials Prices Approaching Housing Boom Highs

Before agreeing to settle on your insurance claim, be sure that the insurance company’s adjuster is taking into account the actual (and not his “estimated”) costs of materials.

Eye on Housing

The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for March. Overall producer price increases have been relatively modest but prices for some building materials have soared in the last year.

The PPI for finished goods decreased 0.6% in March from February (seasonally adjusted) based on declines in energy prices, and prices are up 1.1% from one year ago (unadjusted). In comparison, the PPIs for gypsum, softwood lumber and OSB are up 18%, 30% and 68%, respectively, since last March.

blog ppi 2013_04_1

In the case of gypsum and softwood lumber this brings price levels back to 93% of their housing boom highs, OSB (the most volatile of the three) is back to 65%.

The housing recovery that has gained strength since late 2011 is now putting pressure on a home building infrastructure that downsized during the housing bust. The increase in prices reflects the friction as supply chains and…

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