Construction input prices increased 1.4 percent in January 2025 compared to the previous month, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data. Nonresidential construction input prices increased 0.9 percent for the month.
Overall construction input prices are 1.3 percent higher than a year ago, while nonresidential construction input prices are 0.7 percent higher, ABC said.
Prices increased in all three energy subcategories last month. Crude petroleum prices increased 14.8 percent, while natural gas and unprocessed energy material prices increased 13.7 percent and 13 percent, respectively.
“Materials prices increased at the fastest monthly pace in two years in January,” said ABC Chief Economist Anirban Basu. “This rapid escalation is largely due to three factors. First, energy prices rose sharply. Second, producers often raise their prices at the start of the year. And third, many purchasers rushed to buy inputs before potential tariffs could go into effect, and that surge in demand pushed prices higher.”
Tariffs are the only one of those factors that could continue to push input prices higher in the coming months, Basu said.
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“Import taxes allow domestic producers to raise their prices, and the new 25 percent levies on steel and aluminum will result in just that if they remain in place,” he said. “A strong majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, and the combination of increased demand for construction inputs and ongoing supply chain confusion suggests input price escalation could accelerate through the first half of 2025.”
