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Dive brief:
- Construction input prices rose 1.7% month over month in April and are up 6.2% so far in 2026, according to an analysis of the latest economic data from the Associated Builders and Contractors released Wednesday.
- Energy-related materials and metals drove much of the monthly climb. Crude oil prices, for example, rose 11.3% month-on-month in April, followed by a 9.2% increase in unprocessed energy materials, according to ABC analysis.
- Overall, construction input prices are up 7% from a year ago, according to ABC, with non-residential costs up 7.4%. Cost pressures are likely to continue to weigh on construction activity in the coming months, said Anirban Basu, ABC’s chief economist.
Diving knowledge:
All three energy subcategories rose in April, putting upward pressure on most building materials.
“Construction input prices rose again in April,” Basu said in the statement. “Input prices have risen more in the first four months of 2026 than in the previous three years.”
The 6.2% year-to-date increase outpaces other recent increases, according to the ABC. Over the previous three years, input prices grew by around 4.8%.
Although much of this recent increase comes from oil price hikesthe escalation was also more widespread in April, Basu noted. Materials affected by tariffs, such as iron and steelsaw particularly large price increases during the month, Basu said.
Transport and fuel costs accelerated sharply during April, according to a report from the Associated General Contractors of America. Diesel prices rose 13.6% month-on-month in April alone and are now 73.8% higher than a year ago. Asphalt prices soared 41% month-on-month in April, according to AGC.
“Construction input costs continue to rise much faster than contractor bid prices, particularly for energy-intensive and metal-related materials,” said Macrina Wilkins, director of market information for the Associated General Contractors of America. “This gap makes it increasingly difficult for contractors to accurately price projects and increases the risk of delays, redesigns and deferred construction activity if cost volatility persists.”
The latest inflation data also dampens hopes for lower borrowing costs later this year, Basu said.
“In addition to the direct impact of this escalating re-emerging materials prices, overheated inflation data coupled with upbeat labor market indicators suggest the Federal Reserve is unlikely to cut rates this year,” Basu said. “While contractors remain busy … these cost pressures will likely weigh on construction activity in the coming months.”
