a structure made of steel beams, seen in the distance

Lumber futures limber down, steel prices are still hot, and construction inflation dissipates

In March, annual percent change in PPI for construction materials and services turned negative (-4.4%).


Earlier this month, lumber futures briefly meandered below $375 per thousand board feet (mbf); however, prices swiftly readjusted and are back in the low $400s. PPI for softwood lumber dropped again in March and is down nearly 50% compared to last year. Demand for lumber is subdued by a dormant homebuilding sector. Overall, new residential construction activity contracted in March, but data from the U.S. Census Bureau show a modest month-on-month growth in new single-family construction. Confidence among home builders ticked up for a 4th consecutive month since December, yet the recovery is sluggish due to dampened demand for homeownership. The average 30-year fixed mortgage rate is still above 6% meaning interest rate sensitive buyers are priced out of the market. Dear developers/owners…are higher interest rates pricing your projects out of the market? We measured your pain and built a program around it. Ask us about Project Rescue.

STEEL and others

U.S. steelmakers sap purchasing power out of the market due to robust domestic demand and a weak import market. Mills raised their minimum prices through a series of price hikes that started last November. Hot-rolled coil (HRC) futures are up nearly 48% year-to-date and trading above $1,000 per short ton (st). Domestic cold rolled coil (CRC) prices are up nearly 30% since the beginning of the year and are edging closer to $1,400/st. In March, PPI for some non-ferrous construction commodities inched up month-on-month; asphalt (+2%), precast concrete products (+1.3%), and plastic pipe fittings (+1.8). Prices of non-metallic mineral products stay elevated compared to a year ago; prestressed concrete products (+28%), cement (+17%), insulation materials (11%), flat glass (+11%), construction sand/gravel/crushed stone (+11%). 

Construction material prices are in a state of flux. Unpredictable costs are predictably costly. Advice? Pay for impact, not input. A seasoned construction manager is capable of proposing strategies that inform design, optimize cost, and deliver on schedule. Ask us how we engineer value and de-risk development through Design Phase Management.

See below for a commodities snapshot, or click here for the full report.

April 2023 Commodity Report