A new Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics Producer Price Index data has shown a year-to-year decline in the cost of construction input prices for the first time in 18 months.

Overall construction input prices are now 0.9% lower compared to March of 2022, while nonresidential construction prices were recorded as having fallen 0.6% during the same time period. 

According to the Bureau’s Producer Price Index for March, Iron and Steel as well as Steel Mill Products posted the largest gains since February 2020 at 63.9% and 70.6%, respectively. Prices for Natural Gas and Unprocessed Energy Materials also showed increases. Only eight of the 19 commodities price categories showed decreases since last month, despite the month-to-month decline.

“The good news is that the latest producer price index data, which show broad-based declines in both goods and services prices, suggest that the expected 25 basis point interest rate hike at the Federal Reserve’s May meeting will be the last of the cycle,” ABC Chief Economist Anirban Basu said in a press statement. “The bad news is that this data indicates greatly diminished pricing power among wholesalers and others.”