Nonresidential Construction Materials Costs Increase 0.6% in February

On Thursday, Associated Builders and Contractors (ABC), a national construction industry trade association with more than 23,000 members, reported that the US Bureau of Labor Statistics Producer Price Index shows nonresidential construction input prices increased 0.6% during February. This figure is similar to the 0.6% increase for residential construction.

Overall construction input prices were 0.3% higher than one year ago, while nonresidential construction input prices are 0.1% lower. Iron and steel, steel mill products, and softwood lumber prices all increased sharply in February.

Commenting on the report, ABC Chief Economist Anirban Basu said:

“Nonresidential input prices increased at a rapid pace in February and have risen at a far-too-hot 9.0% annualized rate through the first two months of 2025. Iron and steel prices rose at a particularly fast rate in February, a result of tariffs providing domestic producers with increased pricing power.

Despite the sizable increase over the past two months, nonresidential input prices are still down on a year-over-year basis. That will likely change in the coming months as tariffs continue to put upward pressure on prices. While ABC members are, on balance, still optimistic about their profit margins, according to ABC’s Construction Confidence Index, 23% of them expect their profitability to decline over the next six months, the highest share since October 2024.”