Construction input prices rose 2.2% in September from August and 11.2% from a year earlier, according to an Associated Builders and Contractors (ABC) analysis of producer price index (PPI) data released on October 15, 2026, by the U.S. Bureau of Labor Statistics (BLS). The 12-month increase was the largest in nearly four years, ABC said, with higher fuel costs and tariffed metals both pushing prices up.

Nonresidential construction input prices rose 2.3% for the month, ABC said, and both the overall and nonresidential input measures were up 11.2% between September 2025 and September 2026. ABC also reported increases of 28.3% in crude petroleum prices and 22.2% in unprocessed energy materials prices, while natural gas prices rose 5.1% for the month.

The Associated General Contractors of America (AGC) highlighted a different index from the same data. It said the PPI for inputs to new nonresidential construction jumped 11.9% over the 12 months to September, the most in four years.

Energy dominated the month

The broader BLS release showed how heavily energy weighed on September prices. The PPI for final demand rose 1.3% on a seasonally adjusted basis, the largest advance since a 1.7% rise in March 2022, and climbed 6.3% over 12 months on an unadjusted basis. Prices for final demand goods rose 2.6%, and BLS said more than 80% of that increase was attributable to final demand energy, which jumped 10.8%. Gasoline rose 20.3%, and BLS said the indexes for diesel fuel, jet fuel and crude petroleum also increased.

For construction-related items, AGC said the PPI for diesel fuel, which reflects prices at the refinery or fuel terminal level, more than doubled over 12 months, rising 115.2%. The index for liquid asphalt rose 17.7%, and truck transportation of freight increased 19.3% as motor carriers passed on their fuel costs, the association said.

Metals and steel supply

Metals prices have climbed steeply since tariffs of up to 50% were imposed in 2025, according to AGC. Prices rose year over year by 25.2% for aluminum mill shapes, 27.6% for steel mill products and 30.0% for copper and brass mill shapes. Products that incorporate steel have followed: the index for precast concrete products, which have steel embedded in them, increased 10.5% from a year earlier.

“Construction firms are being hit by a double whammy of tariff- and war-induced materials cost increases as higher metals and fuel costs permeate an ever-wider range of prices,” said Ken Simonson, AGC’s chief economist. “Making matters worse, lead times for key steel components have lengthened, making it harder for contractors to keep projects on schedule.”

AGC said contractors report that producers of beams and other steel shapes needed to erect building frames say their order books are full through spring 2027. Some contractors have been told they will receive only a small fraction of the beams they ordered, and alternative suppliers are refusing orders from new customers, the association said.

ABC Chief Economist Anirban Basu said “higher fuel prices brought about by the conflict in Iran have driven a substantial portion of the increase,” while “prices for tariffed materials like iron, copper and other metal products continue to rise rapidly.”

Why it matters

Both groups described contractors with limited room to pass on costs. AGC said construction firms appear to be absorbing most of the increases amid relatively soft demand for projects other than data centers, which makes it hard to raise bid prices. Basu pointed to ABC’s Construction Confidence Index, which shows more than one in four ABC contractors expect their profit margins to contract over the next six months.

The figures bear on schedules as well as budgets. AGC paired the price data with reports of longer lead times for key steel components and of steel producers whose order books for beams and shapes are full through spring 2027, conditions Simonson said make it harder for contractors to keep projects on schedule.

What to watch

AGC urged federal officials to address the trade disputes behind many of the tariffs and called on Congress to pass a new multi-year surface transportation bill that fully funds road, bridge and transit improvements.

“Public policy uncertainty and instability impedes construction activity. Full stop,” said Jeffrey D. Shoaf, AGC’s chief executive officer. “Resolving trade disputes will ease the price uncertainty that slows private construction.”

The caveats

ABC and AGC analyze the same BLS producer price data but emphasize different measures, which is why their 12-month figures differ (11.2% and 11.9%). ABC’s release does not state the time period for its crude petroleum and unprocessed energy figures. The diesel index cited by AGC measures prices at the refinery or fuel terminal, not at the retail pump.