Florida Construction News staff writer
Construction input prices rose 0.2% in May from the previous month, while prices for nonresidential construction inputs increased 0.3%, according to an analysis released Thursday by Associated Builders and Contractors (ABC).
The year-over-year increase in overall construction input prices was 1.3%, and nonresidential construction inputs rose 1.6% over the same period, based on data from the U.S. Bureau of Labor Statistics’ Producer Price Index.
Energy categories showed mixed trends. Natural gas prices dropped sharply by 18.7%, and unprocessed energy materials declined by 3.5%. Crude petroleum prices, however, rose 1.3% in May.
“Construction materials prices continued to increase at a faster-than-ideal pace in May,” said ABC Chief Economist Anirban Basu. “While input prices are up just 1.3% over the past year, that modest escalation is entirely due to price decreases during the second half of 2024. Costs have increased rapidly since the start of this year, with input prices rising at a 6% annualized rate through the first five months of 2025.”
Basu attributed the acceleration primarily to price hikes in goods affected by tariffs, such as iron and steel. Tariffs on those materials doubled from 25% to 50% as of June 4, suggesting further cost pressures ahead.
“Expect this dynamic to remain over the next few quarters,” Basu said. “Despite rising input prices, contractors remain relatively optimistic about their profit margins, according to ABC’s Construction Confidence Index.”
Basu added that May’s cooler-than-expected inflation numbers have led to rising expectations of interest rate cuts later this year — a potential boost for the construction sector.
