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 wasnโt 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.
“Construction input prices rose for the fifth straight month in September,” said Anirban Basu, Chief Economist, Associated Builders and Contractors. “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.”
The industry maintains strong fundamentals, backed by federally funded infrastructure projects, manufacturing construction, and steady demand for commercial and institutional building. Contractors remain cautiously optimistic about their profit margins and sales over the next six months.
Image Courtesy: Construction Owners
