Construction input prices rose at a 12.6% annualized rate during January and February of this year, while February construction input prices rose 1.3% month-over-month and 3.1% year-over-year, according to Associated Builders and Contractors’ analysis of U.S. Bureau of Labor Statistics Producer Price Index data.
February’s inflated construction input prices were largely due to significant month-over-month increases in natural gas (10.9%), unprocessed energy material (6.0%) and crude petroleum (4.7%) prices, as well as higher copper, lumber and steel prices, ABC reports.
“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.” ABC Chief Economist Anirban Basu said Wednesday morning.
“While input prices are still up a relatively modest 3.1% since February 2025, they rose at a staggering 12.6% annualized rate during the first two months of 2026,” Basu said. Although less than a quarter of contractors expect their profit margins to decrease 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,” Basu added.
Read the full report here.
