Hardware Retailing The Industry's Source for Insights and Information
Energy input prices increased in March at their fastest pace since June of 2020 as the conflict in Iran impacted critical global supply chains, according to an analysis from the National Association of Home Builders (NAHB). Building material prices, excluding energy, rose for the eleventh consecutive month.
The Producer Price Index (PPI) for final demand, reported by the U.S. Bureau of Labor Statistics, increased 0.5% in March, after rising 0.5% in February. The index for final demand services was unchanged in March, while the index for final demand goods rose 1.6% over the month.
The price index for inputs to new residential construction rose 1.2% in March and was up 3.8% from last year. The price of goods used in new residential construction was up 1.8% over the month and up 4.3% from last year, while the price of services was up 0.3% over the month and up 3.1% from last year.
Input Goods
The goods component represents around 60% of the total residential construction price index. On a monthly basis, the price of input goods to new residential construction was up 1.8% in March.
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 goods components represents building materials used in residential construction, which makes up around 93% of the goods index.
Energy input prices rose 21.4% in March and were 20.8% higher than one year ago. The monthly increase in March was the largest since prices rose 30.6% in June 2020. Building material prices were up 0.4% in March and up 3.1% compared to one year ago.
Among input goods, the largest year-over-year increase was for No. 2 diesel fuel as prices were 51.2% higher than a year ago. Metal molding and trim prices were up 45.5% from last year. The largest yearly price decreases were for particleboard and fiberboard with prices down 15.7%. Notably, asphalt reported a price decline of 12.3% in March. For key inputs, ready-mix concrete prices were 0.5% higher than a year ago while softwood lumber prices were 7.8% lower than a year ago.
Input Services
Prices for service inputs to residential construction reported an increase of 0.3% in March. On a year-over-year basis, service input prices were up 3.1%. The price index for service inputs to residential construction can be broken out into three separate components: trade services, transportation and warehousing services and services excluding trade, transportation and warehousing (other services).
The largest component, trade services, was up 3.3% from last year. The price of transportation and warehousing services rose 6.2%, while prices for other services were up 1.5% over the year.
New construction input prices are primarily influenced by domestically produced goods and services, with domestic products accounting for 90% of the weight of the industry index for new construction. Imported goods make up the remaining 10% of the index.
The latest available data, for January 2026, showed that domestically produced goods continue to show price growth compared to imported goods used in new construction. On a year-over-year basis, the index for domestic goods increased 2.6%, while prices for imported goods have fallen 2.7%.
