May 16, 2023 | Warren Shoulberg
While the cost of many building materials increased in March Dodge Data & Analytics shows prices in key categories of wood declined dramatically for the month.
Inflation continues to cause havoc for those in the building and construction trade with the cost of many raw materials up this year but new data on the prices of wood show declines for the most recent month available, March.
Dodge Data & Analytics, which tracks the construction industry, said that the prices of hardwood lumber dropped 14.3%, plywood was down 28.7% and softwood lumber showed the biggest decline in prices, plunging 49.3%.
“Although most prices continue to increase, they are doing so at a slower rate,” Dodge reported. “Most have remained persistently high with the exception of the lumber trade, which is leading the way in deflation.
Ralph Flores, an economist at Dodge Construction Network, in commenting on the pricing news, said, “For builders and developers, the recent fall in the Producer Price Index for final demand is welcome news because it signals that inflationary pressures may be receding. This suggests that the supply chain is stabilizing since the pandemic and may potentially lead to cost savings for construction projects currently in the pipeline. This could make it easier for construction firms to bid for projects and could lead to lower construction costs for developers.”
Flores sees this continuing. “We are optimistic that this trend will hold, and we’ll see further declines in the PPI for final demand in the coming months.”
Builders did see rises in the prices of some materials, like cement (17%), concrete (14.5%), and prepared paint (10.1%) but the costs of some items like hardware, plastics, and structural metal were up only in the low-single-digit range.
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