Tariffs drive construction materials prices higher

Tariffs are having an impact on construction material prices, as overall construction input prices are 2.8% higher than a year ago, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data.

Non-residential construction input prices are 3.2% higher than a year ago. On a brighter note, construction input prices decreased 0.6% in December compared to the previous month.

“Construction materials prices posted a welcome decline in December, yet key inputs are still experiencing rapid escalation,” said ABC chief economist Anirban Basu. “This is especially true for materials most exposed to tariffs. Copper wire and cable prices, for instance, jumped an incredible 4.6% in December and are up more than 22% year over year, and prices for primary nonferrous metals are up nearly 62% over the past 12 months.”

“Prices for commodities less exposed to tariffs, like asphalt or crushed stone, will likely remain tame in the coming months due to soft demand for construction services,” Basu said.