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 Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices increased 2.4% for the month.

Overall construction materials prices are 9.6% higher than one year ago, while nonresidential construction input prices are 9.7% higher. Prices increased in 2 of the 3 energy subcategories last month. Crude petroleum prices increased 11.8% and unprocessed energy materials increased 6.9%. 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.”