ABC: Construction Materials Prices Continue To Rise

Construction input prices increased 0.2% in September compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices also increased 0.2% for the month.

Overall construction input prices were 3.5% higher than in September 2024, while nonresidential construction input prices were 3.8% higher. Prices decreased in all three energy categories in September. Natural gas and unprocessed energy materials prices were down 8.7% and 3.0%, respectively, while crude petroleum prices were down 1.7% in September.

“Construction input prices rose for the fifth straight month in September,” said ABC Chief Economist Anirban Basu. “While that represents the longest streak of monthly increases since the first half of 2022, those increases are relatively modest. Materials prices have risen at a 3.2% annualized rate since April, a rate that is faster than ideal but nowhere near the escalation that occurred in 2021 and 2022.

“Unfortunately, it’s unclear how higher tariffs on key materials like iron and steel and aluminum and copper will affect prices over the next several months, and it’s noteworthy that commodities related to those materials have exhibited significant year-over-year price increases,” said Basu. “Despite the prospect of ongoing materials price escalation, contractors remain cautiously upbeat about their profit margins and sales over the next six months, according to ABC’s Construction Confidence Index.”