Construction Association Officials Warn Rising Input Costs Continue to Outpace Bid Prices While Trade Policy Uncertainty Complicates Project Planning

By KEN SIMONSON

WASHINGTON, D.C. – The producer price index for inputs to new nonresidential construction climbed 7.1 percent from June 2025 to June 2026 despite dipping 0.5 percent last month, according to an analysis by the Associated General Contractors of America of government data.

The 7.1 percent annual increase in construction input prices was roughly double the 3.5 percent increase in contractors’ bid prices for new nonresidential buildings, suggesting contractors continue to absorb much of the increase in materials costs.

Although fuel prices dropped in June, they remained far higher than a year earlier. In addition, steep tariffs on aluminum, steel and products containing copper have continued to push up construction costs.

The producer price index for diesel fuel, which reflects prices at the refinery or fuel terminal level, plunged 18.4 percent in June but nevertheless remained 65.8 percent higher than a year earlier. Simonson noted that fuel prices have risen again since prices for the June index were collected nearly five weeks ago.

Metals prices also remained sharply higher than a year earlier. Aluminum mill shapes prices were up 52.4 percent from June 2025, while copper and brass mill shapes increased 26.0 percent over the year. Steel mill products prices climbed 16.9 percent year over year. All three metals are subject to tariffs as high as 50 percent. Although the index is based on prices of domestic sellers, these firms have been largely matching the prices now charged on imported products.

In contrast, the index for new nonresidential building construction, a measure of what contractors say their bid price would be to erect a new building, rose by just 0.1 percent in June and 3.5 percent over 12 months. That was less than half of the 7.1 percent year-over-year increase in input costs.

While construction input prices declined slightly in June, contractors continue to face significant uncertainty about future material costs. Greater certainty regarding trade policy, along with enactment of a long-term federal surface transportation authorization, would help contractors estimate project costs more accurately, bid work with greater confidence, invest in workers and equipment and keep projects moving efficiently.

“Price stability is important for contractors, project owners, investors and governments,” said Jeffrey D. Shoaf, chief executive officer of the Associated General Contractors of America. “Providing greater certainty on trade policy while enacting a long-term surface transportation bill would help contractors bid work with greater confidence, invest in their businesses and workforce and ensure critical infrastructure projects continue moving forward.”

View producer price index data.