As concerns surrounding COVID-19 persist, commodities prices are largely on the decline, according to the Bureau of Labor Statistics' Producer Price Index for April, as analyzed by IHS Markit.
Prices for the type of softwood lumber used in home construction and renovations have been hit particularly hard, falling 21.1% since March.
The steep monthly decline cut the 26.8% yearly increase recorded in March to just 2% in April.
“The price drop is in line with the contraction in housing starts and permits in March," says Deni Koenhemsi, senior economist at IHS Markit, with the former down 22.3% and and the latter falling 6.8%.
While the overall numbers trend down, prices for some materials, such as ready-mix concrete and concrete pipe, have increased. “While many commodities are registering dropping prices, ready-mix is not one of them,” says Koenhemsi.
Ready-mix prices increased 3.4% year over year, which Koenhemsi attributes mostly to a boost in construction sand, gravel and stone prices. Concrete pipe has risen 7.9% in the same time period.
“We have seen higher price increases before”, says Koenhemsi but adds that “this is noticeable at a time when so many other materials are registering price drops.”