Perhaps the most concerning news in the report was the relatively sharp increase in prices paid for gypsum products. Prices have climbed 6.1% (seasonally adjusted) since a two-month reprieve that saw the gypsum index decline 3.3% between May and July. February to April 2016 was the last two-month period in which gypsum prices rose by 6% or more.
From January to August of 2017, the price index of gypsum products rose 3.9%. The index has more than doubled that pace in 2018, having increased 8.2%, year-to-date.
On a more sanguine note, softwood lumber and OSB prices each decreased substantially in August (not seasonally adjusted). Softwood lumber fell 9.6%, its largest monthly decline per the PPI in over seven years (May 2011).
Similarly, the index for prices paid for OSB (and waferboard) decreased by 11.8% in August, the largest such decline since July 2013.
As expected, the August PPI release captured more decreases in prices paid for softwood lumber that began in mid-June. Even after accounting for the most recent price movements, the average price paid for softwood lumber in 2018 remains the highest on record according to Random Lengths data—22.0% above the prior record set in 1997.
The index for ready-mix concrete (RMC) prices fell (-0.1%), the fourth consecutive monthly decrease after increasing in 10 of the preceding 11 months (seasonally adjusted). After an uncharacteristically large monthly increase in March—when the index rose 3.3%–the PPI for RMC has fallen back in line with its long-run trend.