The latest Associated Builders and Contractors (ABC) construction input price analysis for the month of December has registered a 0.6% decrease over November’s trend-reversing totals. Nonresidential construction input prices were down another 0.4%, with the commercial and multifamily sectors declining by 0.2% and 0.5%, respectively.

Overall construction input prices are now 1.2% higher than a year ago, and nonresidential construction input prices are another 1.6% higher. The price of softwood lumber has notably fallen by 14.6% in a 12-month span, joined by a substantial decline in the price of natural gas, which was down some 60.5% in the same time period.

“Construction input prices fell sharply in December,” ABC’s Chief Economist, Anirban Basu, said in a news release. “While plunging oil prices are the primary factor behind the sharp decline, most input prices were tame in 2023’s final month. That serves as a fitting end to a year during which aggregate input prices increased just 1.2% and many individual commodity prices actually fell.” 

“Despite continued materials price moderation and other positive developments regarding inflation, the outlook is not without risks,” Basu continued. “Piracy in the Red Sea and the resulting diversion of ships from the Suez Canal around the Cape of Good Hope has caused global freight rates to nearly double in the first two weeks of 2024, according to the Freightos Baltic Index. All else equal, rising shipping costs will put upward pressure on certain inputs.”