New data from the Producer Price Index suggests that costs are coming down on things like softwood lumber as part of an overall decline in material costs.
The wild ride up in construction materials in 2023 may have peaked as the year ended and going into 2024 we could see some declines in those costs, new statistics indicate.
An analysis of the Producer Price Index by the Associated Builders and Contractors organization shows encouraging news for builders going into the new year. “Construction input prices declined for the second straight month in November,” ABC’s chief economist Anirban Basu said in a statement. “While much of the recent decline is due to record domestic oil production and the resulting precipitous decline in gas and diesel prices, other commodities like iron and steel and lumber products are currently more affordable than they were at the same time last year.”
Softwood lumber prices dropped by almost 6% in November and have declined by nearly 20% versus the same period a year ago. Construction input prices overall decreased 0.3% in November.
Prices of materials going forward, according to Basu in the statement, are equally as encouraging. “This is a welcome development for an industry still dealing with extraordinarily elevated financing costs and rising labor costs due to ongoing worker shortages.”
