Construction material prices jump 11.2% in 12 months according to Associated Builders and Contractors

Construction input prices increased 2.2% in September compared to the previous month, and are up 11.2% compared to September 2025, according to an Associated Builders and Contractors analysis of the U.S. Producer Price Index data. Both overall and nonresidential Construction input prices rose 11.2% between September 2025 and September 2026. Crude petroleum and unprocessed energy materials prices increased 28.3% and 22.2%, respectively, while natural gas prices increased 5.1% for the month. Anirban Basu, chief economist for the Associated Builders and Contractors, a national trade association representing Construction industry contractors, subcontractors, suppliers and related firms, said Construction input prices have risen more than 11% over the past 12 months, the largest year-over-year increase in nearly four years. Basu said in a statement on Thursday that while higher fuel prices brought about by the conflict in Iran have driven a substantial portion of the increase, prices for tariffed materials like iron, copper and other metal products continue to rise rapidly. Basu also noted that in light of this precipitous and ongoing increase in materials prices, it is unsurprising that more than 1 in 4 Associated Builders and Contractors contractors expect their profit margins to contract over the next six months, according to the group's Construction Confidence Index. The overall producer price index advanced 1.3% in September for final demand goods, which is the largest monthly increase in more than four years. This was driven heavily by a 10.8% surge in energy costs that impacts transportation and material delivery, according to the federal Producer Price Index data. The September index for final demand was 6.3% above the same time last year, the largest 12-month increase since moving up 6.4% in December 2022, the government said. For your building projects and material orders, these jumps mean higher bills on every delivery truck and every metal shipment arriving at your site. Keep a close eye on your estimates before you sign that next fixed-price contract.