Construction material prices are still climbing, and builders are feeling it. A new report from Associated Builders and Contractors (ABC) shows prices rose for the fifth straight month in September, continuing a trend that is putting pressure on projects across the country. Key materials like lumber, steel, and concrete are getting more expensive, making it harder to protect already tight margins.
Overall construction input prices increased by 0.2% in September and are now 3.5% higher than a year ago. Nonresidential construction inputs climbed even more, up 3.8% year over year. On their own, those monthly increases may seem small, but they add up quickly over the life of a project.
“Construction input prices rose for the fifth straight month in September,” ABC Chief Economist Anirban Basu said. “While that represents the longest streak of monthly increases since the first half of 2022, those increases are relatively modest. Materials prices have risen at a 3.2% annualized rate since April, a rate that is faster than ideal but nowhere near the escalation that occurred in 2021 and 2022.”
Ongoing uncertainty around tariffs on materials like iron, steel, and aluminum could keep prices elevated, making it harder for contractors to plan with confidence. For builders already juggling labor shortages and tight budgets, higher material costs mean that some are delaying projects, while others are forced to absorb higher costs or adjust bids to stay viable.
With housing and infrastructure projects on the line, continued price pressure could eventually push costs higher for homeowners and public agencies as well. Despite ongoing price hikes in materials, Basu says contractors remain cautiously optimistic about their profits and sales over the next six months, according to ABC’s Construction Confidence Index.
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