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Dive brief:
- Construction input prices decreased by 1.1% monthly in June though costs are likely to rise again in the coming months, according to an analysis of the latest economic data from Associated Builders and Contractors released Wednesday.
- Easing oil prices led to global materials costs falling month-on-month in June, although the continuation of the Iran war is likely to put further pressure on energy in the near term, said Anirban Basu, ABC’s chief economist.
- “It is likely that the escalation in the price of materials will continue for the next few months,” Basu said in the statement. “The conflict in Iran has resumed, leading to an approximately 15% rally in oil prices, and commodities affected by the tariffs such as iron, steel and copper continue to experience strong price increases.”
Diving knowledge:
Basu said renewed pressure around higher input costs “will likely weigh on profitability in the second half of 2026” for contractors.
Prices declined in two of the three energy subcategories last month, led by a 12.1% and 8.1% month-over-month decline in crude oil and unprocessed energy materials prices, respectively, according to ABC analysis. Natural gas prices, on the other hand, increased by 16.6% during this monthly period.
The iron and steel index rose 2.5% month-on-month in June, according to the ABC report. Other commodities, such as steel products and copper wire, also rose 3.6 percent and 1.7 percent, respectively, according to the analysis.
Despite the monthly decline in energy costs in June, global construction input prices are 7.6% higher than a year ago, according to the ABC report. The prices of non-residential construction inputs, on the other hand, are 7.4% higher.
Ken Simonson, chief economist for the Associated General Contractors of America, noted that June index prices were picked up nearly five weeks ago and reiterated that fuel prices have increased in between He also pointed to the broader context of where current input prices are compared to 2025.
“While fuel prices dipped in June, they remained much higher than a year earlier,” Simonson said. “Additionally, high tariffs on aluminum, steel and copper-containing products have continued to drive up construction costs.”
