In June, the cost of residential building materials, exclusive of energy, increased by 0.5% and was 4.6% higher than it was a year prior.
Energy input prices experienced a 10.3% decrease in June, which was evident in the lower energy prices.
In the interim, the cost of services increased by 5.2% year over year and by 1.0% from the previous month.
The Producer Price Index for final demand decreased by 0.3% in June, following a 0.6% increase in May.
Final demand prices increased by 5.5% in comparison to the previous year.
In June, the index for final demand services increased by 0.3%, while the index for final demand goods decreased by 1.4% for the month.
In June, the price index for inputs to new residential construction decreased by 0.1% and increased by 6.2% from the previous year.
The price of goods used in new residential construction (including energy) decreased by 0.8% over the month and increased by 6.9% from the previous year.
Conversely, the price of services increased by 1.0% over the month and by 5.2% from the previous year.
The lower prices of goods, particularly energy-related inputs, were the primary factor contributing to the overall decline in the residential input price index.
Input Goods
The goods component is more significant than the inputs to the residential construction price index, accounting for approximately 60% of the total.
In June, the price of input products for new residential construction decreased by 0.8% on a monthly basis, marking the first monthly decline since December of the previous year.
The residential construction index’s input goods can be further deconstructed into two distinct components: one quantifies energy inputs, while the other quantifies remaining goods.
The building materials utilized in residential construction are represented by the latter of these two components, which accounts for approximately 93% of the goods index.
In June, energy input prices experienced a 10.3% decrease; however, they were 40.9% higher than they were a year ago.
In June, the cost of building materials increased by 0.5%, and they have increased by 4.6% in comparison to the previous year.
Energy costs continue to exhibit the most significant price increase from a year ago among input products.
In June, diesel fuel prices increased by 65.7% from the previous year. In June, roofing bitumen product prices increased by 4.0% and were 9.2% higher than they were a year ago, excluding energy products. In June, the price of softwood lumber increased by 7.0% compared to the previous year.
The price of ready-mix concrete increased by 1.9% from the previous year, while the price of gypsum building materials decreased by 1.1%.
Input Services
In June, the cost of service inputs for residential construction increased by 1.0%. Service input prices increased by 5.2% on a year-over-year basis.
The price index for service inputs to residential construction can be deconstructed into three distinct components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation, and warehousing component (other services).
The most significant component is trade services, which account for approximately 60% of the total. Other services represent approximately 29% of the total, and transportation and warehousing services account for approximately 11%.
Trade services, the most significant component, experienced a 4.7% increase from the previous year. The cost of transportation and logistic services increased by 16.0%, while the cost of other services increased by 2.0% over the course of the year.
[Read more about this topic on Eyeonhousing.org]