Tariffs push construction materials prices higher

Construction input prices increased 0.6 percent in November compared to October, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ data.  

Nonresidential construction input prices also increased by 0.6 percent. 

Overall construction input prices are 3.4 percent higher than last year, while nonresidential construction input prices are 3.8 higher, ABC says. Prices increased in two of three energy categories last month. Natural gas and unprocessed energy materials prices were up 10.8 percent and 1.4 percent, respectively, while crude petroleum prices were down 1.1 percent in November. 

“Construction input prices surged in November and are now up 3.4 percent on a year-over-year basis,” says ABC Chief Economist Anirban Basu. “While that’s a relatively modest annual increase, it’s also the largest since January 2023, and the trend offers plenty of cause for concern. Many tariff-affected materials, like derivative metal products and switchgear equipment, have experienced considerable price escalation in 2025. Prices for aluminum mill shapes and primary and secondary nonferrous metals are both up more than 25 percent over the past year." 

Basu says it's impossible to know exactly how the cost of tariffs will be distributed throughout the supply chain, making it difficult to know how construction input prices will behave this year. 

“Despite this uncertainty, contractors are on net optimistic that their profit margins will expand during the first half of the year, according to ABC’s Construction Confidence Index, albeit slightly less optimistic than they were at the same time last year," Basu says.