Dive Brief:
- Construction input prices decreased 1.1% month over month in June though costs will likely rise again in coming months, according to an analysis of the latest economic data by Associated Builders and Contractors released Wednesday.
- Relief in oil prices caused overall materials costs to drop month over month in June, though the continuation of the Iran war will likely place renewed pressure on energy in the near term, said Anirban Basu, ABC chief economist.
- “Ongoing materials price escalation is likely over the coming months,” Basu said in the release. “The conflict in Iran has resumed, triggering a roughly 15% rebound in oil prices, and tariff-affected commodities like iron, steel and copper continue to experience steep price increases.”
Dive Insight:
Renewed pressure around higher input costs “will likely weigh on profitability during the second half of 2026” for contractors, said Basu.
Prices decreased in two of three energy subcategories last month, led by a 12.1% and 8.1% month-over-month drop in crude petroleum prices and unprocessed energy materials, respectively, according to the ABC analysis. Natural gas prices, on the other hand, jumped 16.6% during that monthly span.
The index for iron and steel increased 2.5% month over month in June, according to the ABC report. Other commodities, such as steel mill products and copper wire, also ticked up 3.6% and 1.7%, respectively, according to the analysis.
Despite the monthly decrease in energy costs in June, overall construction input prices are 7.6% higher than one year ago, according to the ABC report. Nonresidential construction input prices, meanwhile, are 7.4% higher.
Ken Simonson, chief economist at the Associated General Contractors of America, noted that prices for the June index were collected nearly five weeks ago and reiterated that fuel prices have risen in the interim. He also noted the broader context of where current input prices sit now compared to 2025.
“Although fuel prices dropped in June, they remained far higher than a year earlier,” said Simonson. “In addition, steep tariffs on aluminum, steel and products containing copper have continued to push up construction costs.”
