Construction materials prices are now nearly 10% higher than a year ago, with costs rising sharply across energy, metals and other tariff-sensitive inputs as the industry moves into the second half of 2026.

According to an Associated Builders and Contractors analysis of Bureau of Labor Statistics Producer Price Index data released June 11, construction input prices rose 2.6% in May compared to the previous month, while nonresidential construction input prices increased 2.4%. Overall construction materials prices are 9.6% higher than one year ago, with nonresidential construction input prices up 9.7%.

The latest figures arrive as inflation has begun to reaccelerate. The Consumer Price Index increased 4.2% year over year in May, up from 3.8% in April, according to the U.S. Bureau of Labor Statistics. On a seasonally adjusted basis, the CPI rose 0.5% during the month after increasing 0.6% in April. Energy prices accounted for more than 60% of the monthly increase, while shelter costs rose 0.3% and food prices increased 0.2%. Core inflation, which excludes food and energy, rose 2.9% over the past 12 months, and the energy index is up 23.5% over the same period.

"Construction input prices surged again in May and are now up nearly 10% year over year," said ABC Chief Economist Anirban Basu. "Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel and copper."

Crude petroleum prices rose 11.8% in May, while unprocessed energy materials increased 6.9%. Natural gas prices declined 18.2% during the month. Basu cautioned that while contractors remain optimistic about near-term margins, "materials price escalation and stubbornly high borrowing costs could eventually weigh on profitability."