ConDig (14-Apr-25)  US construction input prices rose for the third straight month in March, driven by surging costs for key materials including steel, copper, and lumber, according to an analysis by Associated Builders and Contractors (ABC) of new federal data released Friday.

Construction input prices increased 0.5% in March, while nonresidential construction input prices climbed 0.6%, ABC said, citing the U.S. Bureau of Labor Statistics’ latest Producer Price Index (PPI) report. 

On a year-over-year basis, input costs were up 0.8% for both categories.

“Construction input prices increased at a rapid pace for the third consecutive month in March and have now risen at a 9.7% annualized rate through the first quarter of 2025,” said ABC chief economist Anirban Basu.

While crude petroleum prices posted a significant decline last month, that was outweighed by sharp increases in natural gas, steel, copper, and lumber, the report said. The data also highlighted the growing impact of tariffs on construction costs.

“The emerging effects of tariffs are glaring in the March data release, with iron and steel, steel mill products and copper wire and cable prices all rising more than 5% for the month,” Basu said.

ABC warned that if the current pace of material cost inflation continues, it could hinder future construction activity. Despite a still-busy industry—reflected in the group’s Construction Backlog Indicator—rising costs and growing economic uncertainty could prompt developers to pause or cancel projects.

“If it persists for any meaningful length of time, this pace of input price escalation, coupled with rising uncertainty, will cause projects to be delayed and canceled,” Basu added.