Construction material costs continued their upward trend in September, rising 0.2 percent from the previous month, according to a new analysis from Associated Builders and Contractors using data from the U.S. Bureau of Labor Statistics’ Producer Price Index. Prices for nonresidential construction inputs matched that increase, also climbing 0.2 percent.

Compared to September 2024, overall construction input prices were 3.5 percent higher, while nonresidential input prices rose 3.8 percent year over year. Despite the overall upward momentum, all three major energy categories saw declines in September: natural gas prices fell 8.7 percent, unprocessed energy materials dropped 3.0 percent, and crude petroleum decreased 1.7 percent.

“Construction input prices rose for the fifth straight month in September,” said ABC Chief Economist Anirban Basu. “This is the longest stretch of monthly increases since early 2022, but the pace remains modest. Since April, materials prices have been rising at a 3.2 percent annualized rate—faster than we’d like, but far from the dramatic spikes seen in 2021 and 2022.”

Basu noted that uncertainty surrounds the potential effects of higher tariffs on essential materials such as iron, steel, aluminum, and copper. “It’s worth watching, especially since commodities linked to those materials have already shown notable year-over-year increases,” he said.

Despite ongoing cost pressures, ABC’s Construction Confidence Index shows that contractors remain cautiously optimistic about future sales and profit margins over the next six months.