Construction input prices increased 1.3 percent in February compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices also increased 1.3 percent for the month.
Overall construction input prices are 3.1 percent higher than one year ago, while nonresidential construction input prices are 3.7 percent higher. Prices increased in all three energy categories last month. Natural gas and unprocessed energy materials prices were up 10.9 percent and 6.0 percent, respectively, while crude petroleum prices were up 4.7 percent in February.
Iron and steel were up 3.4 percent in February and up 15.3 percent year over year. Other materials include construction machinery and equipment (up 0.4 percent in February and up 4.9 percent y/y), copper wire and cable (up 2 percent in February and up 27.1 percent y/y), fabricated structural metal products (up 0.8 percent in February and 9.0 percent y/y), hot rolled steel bars, plates, and structural shapes (down 0.7 percent in February and up 14.9 percent y/y), insulation materials (up 1.0 percent in February and down 0.3 percent y/y), and steel mill products (up 3.0 percent in February and 20.7 percent y/y).
“Construction materials costs surged in February due to significant increases in oil, copper, lumber, and steel prices,” said ABC chief economist Anirban Basu. “Notably, this data does not reflect the precipitous increase in oil prices, which are near $100/barrel as of this morning, caused by the conflict in Iran. That will put upward pressure on construction materials prices directly by raising diesel prices and, indirectly, by raising the cost of shipping other inputs.
“While input prices are still up a relatively modest 3.1 percent since February 2025, they rose at a staggering 12.6 percent annualized rate during the first two months of 2026,” said Basu. “Which is to say, materials price escalation could serve as a real headwind to construction activity over the next several months. Fewer than one in four contractors expect their profit margins to shrink over the next six months, according to ABC’s Construction Confidence Index. Those expectations will bear close monitoring if input prices continue their rapid ascent.”
