Construction materials prices surge 2.6% in May, up nearly 10% year over year

Construction input prices increased 2.6% in May compared to the previous month, according to an analysis by Associated Builders and Contractors (ABC) of new U.S. Bureau of Labor Statistics Producer Price Index data. Nonresidential construction input prices increased 2.4% for the month.

For May, overall construction materials prices were 9.6% higher than one year ago, while nonresidential construction input prices were 9.7% higher. Prices increased in two of the three energy subcategories. Crude petroleum prices increased 11.8% and unprocessed-energy materials increased 6.9%, while natural gas prices were down 18.2% in May.

“Construction input prices surged again in May and are now up nearly 10% year over year,” said ABC Chief Economist Anirban Basu. “Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel, and copper.

“Contractors remain optimistic that their profit margins will expand over the next six months, according to ABC’s Construction Confidence Index, yet it appears likely that materials price escalation and stubbornly high borrowing costs could eventually weigh on profitability.”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.

About Associated Builders and Contractors

Associated Builders and Contractors (ABC) is a national construction industry trade association established in 1950 with 67 chapters and 24,000 members. Founded on the merit shop philosophy, ABC helps members offer a robust employee value proposition, develop people, win work, and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work.