Last month, overall construction input prices were 0.9% lower than in March 2022, the first year-to-year decline since August 2020, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released April 14. Nonresidential construction input prices dropped 0.6% over the past year.

Construction input prices are up 39% since February 2020, the month before the COVID-19 pandemic began, according to ABC.

Construction input prices in March increased 0.2% over February. In March, nonresidential construction input prices rose 0.4%, according to ABC’s analysis.

“Construction input costs are down on a year-over-year basis for the first time since August 2020,” said ABC Chief Economist Anirban Basu. “The good news is that the latest PPI 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. The bad news is that this data indicates greatly diminished pricing power among wholesalers and others,” said Basu. “While some will cheer the notion that rate increases are set to end soon, the Federal Reserve may want to maintain higher interest rates for longer to ensure that inflation has been suppressed. This, along with other signs of slowing economic activity, suggests that the possibility of recession remains elevated, though the economic outlook is increasingly uncertain.”