Construction input prices fell again in November, down 0.8% for the month, according to the Dec. 12 producer price index (PPI) release by the U.S. Dept. of Labor. Prices have fallen in five of the past six months but still are 0.6% higher on a year-over-year basis. Inputs to nonresidential construction fell 1.1% and are unchanged from the same time last year.

“Although there are times when deflation can be a reflection of declining demand for goods and services, the deflation happening now in an array of commodities should be viewed positively, both from the perspective of the broader economy and for nonresidential construction,” said Associated Builders and Contractors Chief Economist Anirban Basu.

“A confluence of factors have combined to hammer away at key commodity prices in recent weeks, including a stronger U.S. dollar, evidence of growing financial difficulties in China, ongoing economic weakness in Europe, and softening emerging world economies in Russia and Brazil,” said Basu. "At the same time, U.S. production of certain key commodities continues to expand, including oil and natural gas. As a result, construction materials prices are now in retreat. These factors imply that materials prices are unlikely to surge higher in early 2015.

“The domestic economy continues to benefit from the falling input prices,” said Basu. “Gasoline prices at or below the $3 mark in all 48 contiguous states has bolstered consumer confidence, and the declining input prices will improve contractor margins and push ahead many construction projects that would otherwise be stalled.”

Crude energy materials prices fell 3.7% in November and are 11.1% lower than one year ago. Natural gas prices fell by 7.7% for the month and are unchanged on a year-over-year basis. On a monthly basis, natural gas prices have now fallen in eight of the previous nine months; however, on a yearly basis, natural gas prices have risen every month for the past two years. Overall, the nation’s final demand prices as measured by, the PPI, fell by 0.2% in November.

The following materials prices increased in November.

• Prices for plumbing fixtures expanded 0.2% in November and are up 3.1% on a year-over-year basis.

• Concrete products prices expanded 0.5% in November and are up 4.3% on a yearly basis.

• Fabricated structural metal product prices grew 0.1 for the month and have expanded 1.6% on a year-over-year basis.

• Prices for prepared asphalt, tar roofing and siding expanded 1.6% for the month and 1.9% on a year-ago basis.

Seven of the 11 key construction inputs did not experience price increases for the month.

• Iron and steel prices fell 2% in November and are down 1.4% from the same time last year.

• Steel mill products prices fell 0.3% for the month but are 2.1% higher than one year ago.

• Softwood lumber prices fell 1.9% for the month but are 0.7% higher than a year ago.

• Natural gas prices shed 7.7% in November and are unchanged from a year ago.

• Crude petroleum prices fell 3.2% in November and are down 17.8% from the same time last year.

• Crude energy materials prices fell 3.7% in November and are 11.1% lower year over year.

• Nonferrous wire and cable prices fell 0.7% on a monthly basis and 0.5% on a yearly basis.