In March 2025, construction input prices rose by 0.5%, marking the third consecutive month of significant increases, according to an analysis by Associated Builders and Contractors (ABC) of U.S. Bureau of Labor Statistics data. Nonresidential construction input prices experienced a slightly higher uptick of 0.6% for the month. While crude petroleum prices declined during this period, the decrease was offset by substantial price hikes in natural gas, steel, copper, and lumber. Notably, the prices of iron and steel, steel mill products, and copper wire and cable each surged by over 5% in March, highlighting the pronounced impact of tariffs on these essential construction materials.
ABC’s Chief Economist, Anirban Basu, emphasized that the rapid escalation of input prices, now rising at a 9.7% annualized rate through the first quarter of 2025, poses significant challenges for the construction industry. He warned that if this trend persists, it could lead to project delays and cancellations, despite the current robustness indicated by ABC’s Construction Backlog Indicator. The combination of escalating material costs and increasing economic uncertainty may undermine contractor confidence and disrupt the momentum of ongoing and planned construction projects.
