Construction material prices continued to trend upward this fall, with new federal data showing a steady rise across key input categories. According to an analysis by Associated Builders and Contractors (ABC) of the latest U.S. Bureau of Labor Statistics Producer Price Index, construction input prices increased 0.2% in September compared to August. Nonresidential construction input prices mirrored the trend, also rising 0.2% for the month.
On a year-over-year basis, cost pressures remain visible. Overall construction input prices were 3.5% higher than in September 2024, while nonresidential construction inputs were up 3.8% over the same period.
Despite the uptick, the movement wasn’t uniform across all categories. Prices in all three major energy components fell in September. Natural gas costs dropped 8.7%, unprocessed energy materials fell 3.0%, and crude petroleum slid 1.7%, providing a partial offset to broader construction cost increases.
September’s modest rise marks the fifth consecutive month of input price increases—an ongoing trend that industry economists are monitoring closely.
“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.”
Basu noted that while prices are not spiking the way they did during the pandemic-era supply chain disruptions, new policy developments could reshape market conditions moving forward.
“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.”
Contractors are facing a mix of pressures:
The combination is creating a cautious but resilient outlook across the U.S. building sector.
Industry leaders are particularly concerned about how recently enacted or proposed tariffs on iron, steel, aluminum, and copper could shape pricing trends through the winter and into early 2026. Many of these commodities have already experienced significant year-over-year increases, suggesting any additional cost burden could amplify volatility.
Despite inflationary pressures, high borrowing costs, and global supply concerns, ABC’s internal confidence index shows contractors generally expect:
The industry maintains strong fundamentals, backed by federally funded infrastructure projects, manufacturing construction, and steady demand for commercial and institutional building.
Originally reported by Associated Builders and Contractors in IBM Journal.
