Residential building material prices, excluding energy, rose 0.5% in June and were up 4.6% from a year ago. Lower energy prices were apparent in June, as energy input prices fell 10.3% over the month. Meanwhile, prices for services rose 5.2% over the year, and were up 1.0% from the previous month.

The Producer Price Index for final demand declined 0.3% in June, after rising 0.6% in May. Compared to a year ago, final demand prices were up 5.5%. The index for final demand services rose 0.3% in June, while the index for final demand goods fell 1.4% over the month.

The price index for inputs to new residential construction fell 0.1% in June and was up 6.2% from last year. The price of goods used in new residential construction (including energy) was down 0.8% over the month and up 6.9% from last year, while the price of services was up 1.0% over the month and up 5.2% from last year. The decline in the overall residential input price index was largely driven by lower goods prices, particularly energy-related inputs.

Input Goods

The goods component has a larger importance to the inputs to residential construction price index, representing around 60% of the total. On a monthly basis, the price of input goods to new residential construction was down 0.8% in June, the first monthly decline since December of last year.

The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring remaining goods. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index. Energy input prices fell 10.3% in June but were 40.9% higher than a year ago. Building material prices were up 0.5% in June and up 4.6% compared to one year ago.

Among input goods, energy costs continue to show the largest price increase from a year ago. Diesel fuel costs were up 65.7% from a year ago in June. Outside of energy products, roofing asphalt product prices were up 9.2% from a year ago and rose 4.0% in June alone. Softwood lumber prices showed upward movement in June, with prices 7.0% higher than a year ago. Ready-mix concrete prices were up 1.9% from a year ago, while gypsum building material prices were down 1.1% from a year ago.

Input Services

Prices for service inputs to residential construction rose 1.0% in June. On a year-over-year basis, service input prices were up 5.2%. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation, and warehousing component (other services).

The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 4.7% from a year ago. The price of transportation and warehousing services rose 16.0%, while prices for other services were up 2.0% over the year.