Dive Brief:
- Construction input prices jumped 1.2% month over month in August and now sit about 8.9% higher than August 2025, according to an analysis of the latest U.S. Bureau of Labor Statistics data by Associated Builders and Contractors released Thursday.
- Year-over-year cost surges of 10% or more hit many key construction materials, including switchgear, iron, steel, softwood lumber, copper wire and several derivative metal products, according to the report.
- “Ongoing input price escalation is likely to weigh on profitability over the next several months,” said Anirban Basu, ABC chief economist. “This is especially true given recent escalation in the trade war with Canada and the fact that oil prices have jumped back above $100 per barrel.”
Dive Insight:
Higher material prices are making more developers slam the brakes on construction activity, according to Associated General Contractors of America.
About 55% of contractors reported abandonments or delays in the past six months, according to AGC’s September survey. One-third of respondents attributed those disruptions to increasing costs, according to the AGC report.
“Construction firms are being squeezed by tariff- and war-induced materials cost increases, even as they boost wages to attract personnel,” said Ken Simonson, AGC chief economist, in a news release. “Those cost increases, according to our latest survey, are a major reason project owners are cancelling, postponing or scaling back projects.”
Metal and petroleum products posted some of the steepest year-over-year price increases, according to the ABC analysis. Steel mill products jumped 23.4% since August 2025, while iron and steel rose 17.9% during that time. Crude petroleum, meanwhile, increased 34.9% over the past 12 months.
Switchgear and copper wire, both critical for data center builds, went up 12.3% and 27.2%, respectively, since August 2025.
“As firms pay more to address labor shortages and material prices continue to climb, they are caught between pricing themselves out of the market or performing work at a loss,” said AGC CEO Jeffrey Shoaf. “Rising materials prices and a lack of real federal commitment to construction workforce development are acting as a brake on economic activity that could, if left unaddressed, have significant consequences for the broader economy.”
