Construction materials prices continued to increase in May.
Overall construction input prices (includes materials, energy and equipment) increased 0.2% in May compared to the previous month, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data. Commercial construction input prices increased 0.3% for the month and are up 2/3% higher than a year ago.
The accelerating input price escalation is largely due to rapid price increases for tariff-affected goods like iron and steel, said ABC chief economist Anirban Basu.
“Expect this dynamic to remain over the next few quarters,” he advised. “These data predate tariffs on iron and steel rising from 25% to 50%, which went into effect on June 4.”
The price of steel mill products rose 7.1% in May compared to April, while iron and steel prices increased 3.2%. Prepared asphalt, tar roofing and siding products prices rose 3.7%.
“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,” Basu said. ”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.”
In some good news, prices decreased in two of the three energy categories in May. Natural gas prices were down 18.7%, while prices for unprocessed energy materials were down 3.5%. Crude petroleum prices increased 1.3% in May.
