According to a recently released analysis of U.S. Bureau of Labor Statistics Producer Price Index data by Associated Builders and Contractors (ABC), construction input prices have fallen 0.9% in November from October readings. Additionally, nonresidential construction input prices fell 0.8% in November. 

Though the decline in materials prices is positive news, they are still up nearly 40% since February 2020. Construction input prices are up 11.9% from this time last year, with nonresidential construction input prices 11.5% higher. However, input prices increased in only four of the 11 subcategories on a monthly basis. Natural gas inputs saw the largest decrease in prices, falling 15.8% last month, while unprocessed energy prices dipped 7.8%, and crude petroleum prices declined 2.3%. 

“The decline in wholesale prices for many construction inputs is generally positive news,” said ABC Chief Economist Anirban Basu. “Increasingly, we are receiving news that construction input inflation has peaked as supply chains continue to normalize despite a range of geopolitical stressors. In November, much of the relief emerged from lower energy prices. According to ABC’s Construction Confidence Index, contractors are already expecting growth in sales and employment levels over the next six months; this report will do little to curb that optimism.”