Construction material prices climbed 0.2% in June and are up 2.5% on a year-over-year basis, according to Associated Builders and Contractors. Prices in June were 42.1% higher than in February 2020.
Nonresidential construction material prices rose 0.3% from May to June and increased 2.5% compared with one year ago. Softwood lumber prices are up 7.7% year over year and down 1.9% from May to June. Iron and steel prices are up 3.1% year over year and down 3.8% for the month. Natural gas rose 5.9% from May to June and is up 18.1% year over year. Crude petroleum fell 0.1% for the month and is down 19.4% year over year.
鈥淣onresidential input price escalation has accelerated in 2025, with prices rising at a rapid 6% annualized rate through the first half of the year,鈥 said ABC Chief Economist Anirban Basu. 鈥淒espite this acceleration, prices for many of the inputs most directly affected by tariffs, like iron and steel, declined in June. While it is unclear how and when trade policy will affect construction materials prices, the impact was evident in June鈥檚 Consumer Price Index release; prices for core goods excluding automobiles rose at the fastest pace since late 2021.
鈥淓conomic uncertainty remains extraordinarily elevated,鈥 Basu continued. 鈥淲hat is all but certain is that the Federal Reserve will not be cutting interest rates at its July meeting. Despite higher-for-longer interest rates and rising input prices, contractors remain relatively optimistic about their profit margins, according to ABC鈥檚 Construction Confidence Index. This could be due to 100% bonus depreciation鈥攎ade permanent in the One Big Beautiful Bill鈥攐ffsetting higher operating costs.鈥
