New York Construction Report staff writer
Contractors are seeing cost pressures return as prices for key construction materials continue to climb, according to a new analysis of government data by the Associated General Contractors of America (AGC).
The producer price index for materials and services used in nonresidential construction rose 0.2 per cent in September and 3.2 per cent compared with September 2024. AGC officials said the data highlights how input-cost pressures are resurfacing even as demand in several private-sector construction segments remains uneven.
“Persistent input-price pressure, even when the increases are modest, creates a stop-and-go rhythm in procurement and production instead of a steady flow contractors and suppliers need,” said Macrina Wilkins, the association’s senior research analyst. “These month-to-month swings make it harder for firms to plan confidently and protect already-thin margins.”
Several major input categories posted significant year-over-year increases. The producer price index for aluminum mill shapes rose 1.7 per cent in September and 26 per cent over the past 12 months. Steel mill products fell 1.5 per cent for the month but were up 12.4 per cent year-over-year. Precast concrete products increased 0.3 per cent for the month and 5.5 per cent year-over-year, while diesel fuel, a key cost for off-road equipment and transportation, climbed 1.8 per cent in September and 8.2 per cent from a year earlier.
AGC officials said the September figures show contractors are facing modest but persistent cost increases while bid prices have begun to soften. This mismatch—rising input costs paired with weaker final demand—adds pressure to firms in a private-sector market that remains uneven. Uncertainty over tariffs and global trade conditions further complicates procurement planning and long-term price negotiations.
“Contractors can manage modest cost increases, but they need a predictable environment to keep projects moving,” said Jeffrey D. Shoaf, AGC chief executive officer. “Greater clarity on tariff policy and progress on outstanding trade issues would help stabilize materials markets and give firms more confidence to plan for the work ahead.”
