Construction input prices increased 0.6 percent in February, 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 0.6 percent for the month.
Overall construction input prices are 0.3 percent higher than one year ago, while nonresidential construction input prices are 0.1 percent lower. Iron and steel, steel mill products, and softwood lumber prices all increased sharply in February.
“Nonresidential input prices increased at a rapid pace in February and have risen at a far-too-hot 9 percent annualized rate through the first two months of 2025,” said ABC chief economist Anirban Basu. “Iron and steel prices rose at a particularly fast rate in February a result of tariffs providing domestic producers with increased pricing power.
“Despite the sizable increase over the past two months, nonresidential input prices are still down on a year-over-year basis,” says Basu. “That will likely change in the coming months as tariffs continue to put upward pressure on prices. While ABC members are, on balance, still optimistic about their profit margins, according to ABC’s Construction Confidence Index, [and] 23 percent of them expect their profitability to decline over the next six months, the highest share since October 2024.”
For more information about tariffs and the metal construction industry, read previous articles:
Five Ways President Trump’s Policies Could Reshape the Construction Industry
Steel Tariffs Fuel Price Surge; Construction Starts Decline
Steel Prices Spike: 25 Percent Tariff Threatens Even More Increases
How Contractors Can Plan for Impact of Steel, Aluminum Tariffs