Producer prices for softwood lumber have dropped drastically from their midyear highs. They are now at their lowest levels since January 2017. The U.S.-Canada trade war sparked the surge in lumber prices. Softwood lumber prices fell 3 percent in November 2018, the second consecutive decrease for the index to the latest producer price index released by the Bureau of Labor Statistics. The producer price index for softwood lumber has fallen 23.6 percent (not seasonally adjusted) since setting cycle and alltime highs in June 2018.
While the lumber price drop will give homebuilders some relief, other construction costs continue to climb, including steel costs, a victim of the U.S.-China trade war, and labor costs, which is already slowing down production.