Construction materials prices increase for the fifth-straight month

Construction input prices increased 0.2 percent in September compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released Nov. 25. Nonresidential construction input prices also increased 0.2 percent for the month.

The Washington-based association says this is the fifth-straight month construction input prices increased.

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

Overall construction input prices were 3.5 percent higher compared to September 2024, while nonresidential construction input prices were 3.8 percent higher. Prices decreased in all three energy categories in September. Natural gas and unprocessed energy materials prices were down 8.7 percent and 3 percent, respectively, while crude petroleum prices were down 1.7 percent in September.

“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,” Basu says. “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 the ABC Construction Confidence Index.”