Tariffs Drive Surge in March Construction Materials Prices

Construction input prices increased 0.5% in March, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices increased 0.6% for the month.

Both overall and nonresidential construction input prices are 0.8% higher than one year ago. While crude petroleum prices fell considerably in March, that decline was more than offset by rapidly rising natural gas, steel, copper and lumber prices.

“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 Anirban Basu, ABC chief economist. “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. While contractors remain busy for the time being, according to ABC’s Construction Backlog Indicator, this pace of input price escalation, coupled with rising uncertainty, will cause projects to be delayed and canceled if it persists for any meaningful length of time.”