After Years of Record Gains, Building Materials Price Growth Slowed Significantly in 2022
Building materials prices slowed a staggering 60% in 2022, posting just an 8.3% gain throughout the entire year compared with an 18.9% growth rate during the year prior. December marked the fourth consecutive month of declines in the producer price index (PPI) for inputs to residential construction with a 0.3% drop.
Softwood lumber prices fell 6.9% in December and have fallen 26.1% over the course of 2022, while steel mill products were down 2.7% in December and 28.7% YTD after soaring 128% in 2021.
The PPI for gypsum building materials declined 0.2% in December but increased 17.6% over the course of 2022. Although the 2022 price increase was more than three times the 25-year average, it was substantially lower than the 23% increase seen in 2021.
The trend of ready-mix concrete (RMC) prices continued its historic pace as the index increased 1.6% in December. The PPI for RMC increased 13.6% in 2022, twice the 2021 increase and nearly seven times the historical average.