New York Construction Report staff writer
Rising tariffs and limited domestic supply are driving up the cost of key construction materials, officials with the Associated General Contractors of America (AGC) said in a statement, urging lawmakers to provide greater certainty about future demand to help boost U.S. production.
An analysis by the trade group of two government reports showed the producer price index for materials and services used in nonresidential construction rose 2.9 per cent from January 2025 to last month, while total construction spending slipped 0.4 per cent from December 2024 to December 2025.
“Although producer indexes are based on selling prices of domestic producers, the steep tariffs on imported metals and products are clearly enabling U.S. sellers to push up costs for construction materials and equipment,” said Ken Simonson, the association’s chief economist. “Providing domestic producers with greater certainty about future demand should encourage greater production and, ultimately, lower prices.”
The report highlighted dramatic increases in specific materials. The producer price index for aluminum mill shapes rose 33 per cent, while steel mill products jumped 20.7 per cent over the same period, marking the largest year-over-year increases since the supply-chain disruptions of early 2022. Copper and brass mill shapes climbed 15.7 per cent. Simonson noted that tariffs of 50 per cent on imported metals, imposed last June, have contributed to the steady rise in prices.
Construction spending showed a mixed pattern in 2025. Public construction increased 3.4 per cent, although highway and street construction — the largest segment — rose only 0.8 per cent. Private nonresidential spending fell 1.8 per cent, weighed down by an 11.4 per cent decline in manufacturing construction, the largest subcategory. Private residential construction slipped 1.3 per cent, as a 3.6 per cent decline in single-family construction offset a 2.9 per cent increase in multifamily projects.
Association officials stressed that domestic producers may struggle to expand capacity for critical materials without clearer signals of future demand. To address this, the group recently launched a national campaign called America’s Moving Forward, urging Congress to pass a new surface transportation bill before the current legislation expires at the end of September.
“It will be hard for suppliers to boost production if they have no idea about future demand for their products,” AGC CEO Jeffrey D. Shoaf said in a statement. “Passing the surface transportation bill — the single largest federal construction measure — on time will give domestic suppliers the certainty they need to boost production and offset the impacts of tariffs.”
