News : Inflation - wood prices continue to rise in the US
- Posted by Marie Le Berre
According to the U.S. Bureau of Labor Statistics, lumber prices continue to exceed historic highs. Through March, lumber and wood prices are up 65 percent year-over-year, the fastest annual rate of appreciation on record.
According to the National Association of Home Builders, wood prices have, on average, added about $36,000 to the price of a new single-family home and $13,000 to the value of a new multi-family home over the past year.
With regard to the manufacturing indices
The Purchasing Manufacturing Index (PMI), a measure of manufacturing sentiment where a reading above 50 indicates expectations of expansion, fell to a lower level than last year. The index fell to 60.7 in April 2021, a 4.0 percent month-over-month decline, according to theInstitute for Supply Management. Despite the drop, the index has remained "expansionary" since it passed the 50 mark in April 2020.
A subcomponent of the index that measures input prices rose 4.0 percent in April 2021, the largest month-over-month increase among all subindices.
Imports experienced the largest decline of any subcomponent, falling 4.5 percent month-over-month, although they remained on the positive side of the expansion forecast line (index of 52.2). The only subindex contracting through April 2021 is the inventory subindex, which fell from 50.8 to 46.5.
According to the survey, supply problems, particularly the global shortage of semiconductors affecting cars, transportation equipment and consumer electronics, are having a significant impact on producers. Rising energy and raw material prices are also weighing on manufacturing output.
Sources: SVN Research, Economic Update, May 14, 2021, Chandan Economics.
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