Construction input prices increased 0.2 percent in June compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index. Nonresidential construction input prices increased 0.3 percent for the month.
Overall construction input prices are 2.1 percent higher than a year ago, while nonresidential construction input prices are 2.5 percent higher. Prices increased in two of the three energy categories last month. Natural gas and unprocessed energy materials prices were up 5.9 percent and 1.4 percent, respectively, while crude petroleum prices decreased 0.1 percent in June.
Despite smaller increases to prices over the past month, the fact remains that construction input prices have spiked 43 percent since February 2020.
Even with the impacts of tariffs, the prices of iron and steel were down 3.8 percent last month. However, prices are still up 3.1 percent from last year and 45 percent since February 2020.
For materials impacting metal construction: adhesives and sealants were up 0.8 percent in June and are up 40 percent since February 2025; construction machinery and equipment was up 0.7 percent in June and is up 34 percent since February 2020; copper wire and cable were up 1.3 percent in June and 55 percent since February 2020; fabricated structural metal products were up 0.7 percent in June and 59 percent since February 2020; hot rolled steel bars, plates, and structural shapes were up 1.4 percent in June and 39 percent since February 2020; insulation materials were down 0.9 percent in June but up 47 percent since February 2020; and steel mill products were down 5.5 percent in June, but are still up 66 percent since February 2020.
“Nonresidential input price escalation has accelerated in 2025, with prices rising at a rapid 6 percent annualized rate through the first half of the year,” said ABC chief economist Anirban Basu. “Despite this acceleration, prices for many of the inputs most directly affected by tariffs, like iron and steel, declined in June. While it is unclear how and when trade policy will affect construction materials prices, the impact was evident in June’s Consumer Price Index release; prices for core goods excluding automobiles rose at the fastest pace since late 2021.
“Economic uncertainty remains extraordinarily elevated,” said Basu. “What is all but certain is that the Federal Reserve will not be cutting interest rates at its July meeting. Despite higher-for-longer interest rates and rising input prices, contractors remain relatively optimistic about their profit margins, according to ABC’s Construction Confidence Index. This could be due to 100 percent bonus depreciation—made permanent in [recent legislation]—offsetting higher operating costs.”
