PPI: Plywood is the YOY outlier

The Producer Price Index for final demand increased 0.2 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported on Thursday.

Looking at some of the key commodities in the hardware and buidling supply industry, Plywood was an outlier, dropping 5.6 percent compared to the the year ago index. Hardwood lumber showed the largest year over year gain of 7.3 percent.

On a monthly basis, Softwood lumber showed a 2.6 percent increase, the largest increase among the 10 commodities tracked.

According to analysis from Associated Builders and Contractors, energy prices factored into higher construction-material costs in October.

“Higher energy prices drove the increase in construction input prices observed in October,” said ABC Chief Economist Anirban Basu. “While prices for a few other materials, like concrete and copper products, also rose for the month, overall input prices are lower than they were one year ago and have fallen 5% since reaching an all-time high in June 2022.”

Basu added: “The next administration’s trade policy increases uncertainty regarding construction materials costs. Beyond the implications of potential tariffs, input prices may rise in the short term if purchasers rush to import materials prior to the implementation of those policies."