Construction input prices in June were 20.1% higher than prices in June 2021, while prices increased 1.9% in June compared with May, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Product Price Index data.

Input prices were down in four of the 11 subcategories reported in the PPI on a month-over-month basis, with the largest decline in the softwood lumber category (-24.8%). Softwood lumber prices are down 38.1% on a year-over-year basis, though are 48.4% higher compared with their February 2020 levels, according to the ABC.

“It’s no secret that contractors and their customers have been walloped by massive increases in construction materials prices,” says ABC chief economist Anirban Basu. “That inflation continued through June, as reflected in the decline in profit margin expectations seen in the most recent reading of ABC’s Construction Confidence Index. But more recently, key commodity prices have declined, so it may be possible we have achieved peak inflation.”

Other categories recording month-to-month price decreases include iron and steel, steel mill products, and nonferrous wire and cable. Of the categories analyzed by the ABC, fabricated structural metal products recorded the largest year-over-year price increase in June (+26.2%). Steel mill products and iron and steel categories recorded the largest price increases since February 2020, 124.3% and 97.4%, respectively.

“With much of the world at risk of recession, there is likely to be further downward pressure on commodity prices going forward,” Basu says. “Oil prices had been in the range of $120/barrel recently. As of this morning, the price of oil has dipped into the low $90s. Similarly, natural gas prices have been in decline. In part, this may be because global supply chains are readjusting to disruptions caused by the Russia-Ukraine war. The war creates an ongoing risk of sudden spikes in certain commodity prices, but we appear to be entering a new phase in the input price trajectory.”

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