US construction input prices rose sharply in August, adding further pressure to contractor margins as costs increased across a broad range of building materials.

Construction input prices increased 1.2% from July and 8.9% from August 2025, according to an Associated Builders and Contractors analysis of the latest US Bureau of Labor Statistics Producer Price Index data. Input prices for nonresidential construction also rose 1.2% month on month and were 8.8% higher year on year.

Energy costs were among the drivers of the monthly increase. Crude petroleum prices rose 5.2% in August, while unprocessed energy materials increased 1.5%. Natural gas was the exception, falling 11.6%.

But the pressure extends well beyond energy. ABC chief economist Anirban Basu said prices for iron and steel, softwood lumber, switchgear, copper wire and cable and several downstream metal products are now more than 10% higher than a year ago.

The broad-based increases could squeeze construction margins in the coming months, even as contractors remain relatively confident about their profitability.

Basu also pointed to renewed trade tensions with Canada and oil prices moving back above $100 per barrel as additional risks to construction costs.



Why it matters
The August data suggest construction’s materials-cost problem is becoming increasingly broad rather than being confined to one or two volatile commodities. An 8.9% annual increase in overall inputs — coupled with double-digit increases in several core construction products — raises the risk of tighter contractor margins, higher bids and additional pressure on project budgets.


 

Source: constructiondig.com