Materials prices rose 3.1% in February, year over year, according to the producer price index recently released by the US Bureau of Labor Statistics. Prices have increased by 1.3% since January.
Entries to all types of construction experiences are increasing, with commercial work seeing the biggest annual increase at 4.7%. Overall, nonresidential materials rose 3.7%, while entries into multifamily construction rose 3.2%.
“Building materials costs rose in February due to significant increases in oil, copper, lumber and steel prices,” Anirban Basu, chief economist at Associated Builders and Contractors, said in a statement. “While input prices are still rising by a relatively modest 3.1% since February 2025, they rose at a staggering annualized rate of 12.6% in the first two months of 2026.”
Since February 2025, natural gas prices have increased by 30%, while copper wire and cable and steel products have increased by 27.1% and 20.9%, respectively. Iron and steel prices also saw a double-digit increase, at a rate of 15.3%.
This trend is expected to continue, given the current situation, Basu said. “Notably, these data do not reflect the sharp rise in oil prices, which are approaching $100 a barrel as of this morning, caused by the conflict in Iran,” he said. “This will put upward pressure on construction material prices directly by increasing diesel prices and indirectly by increasing the shipping cost of other inputs.”
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