Tariffs lifted nonresidential construction costs 3.2% in 2025

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Dive Temporary:

• Nonresidential building enter prices completed 2025 up 3.2% 12 months over 12 months, largely because of tariff-related impacts. For general building, which embrace residential builds, prices gained 2.8%, in response to an Related Builders and Contractors evaluation of U.S. Bureau of Labor Statistics’ Producer Value Index figures.
• For December, construction input prices ticked down 0.6% month over month to finish the 12 months, whereas nonresidential prices had been 0.7% decrease. However these dips couldn’t offset the annual soar. 
• Costs for supplies most uncovered to tariffs, together with copper wire and cable, jumped 22% 12 months over 12 months, and appear poised to proceed climbing in 2026 as “key inputs are nonetheless experiencing speedy escalation,” stated Anirban Basu, ABC chief economist.

Dive Perception:

For commodities much less uncovered to tariffs, comparable to asphalt or crushed stone, the index ought to hover across the identical stage within the coming months, stated Basu. 

That’s doubtless because of general soft demand for construction services exterior of the booming information heart sector. 

However the expectation for more price jumps this year has not but dimmed contractor optimism, stated Basu. About seven in 10 ABC members anticipate revenue margins to remain the identical or develop over the following two quarters, he stated.

Regardless of that upbeat be aware, tariff impacts on materials costs have begun to make their manner into the info, and economists don’t assume that may finish quickly, in response to the Related Normal Contractors of America.

“Despite the fact that these indexes are based mostly on promoting costs of home producers, it’s clear that the steep tariffs on imported metals and merchandise are enabling U.S. sellers to push up prices for building supplies and gear,” stated Ken Simonson, AGC chief economist. “Building prices are certain to rise additional in 2026 so long as the present tariffs stay in place.”

The producer value index for aluminum mill shapes surged 30.5% from December 2024 to December 2025, the most important year-over-year enhance because the provide chain disruptions of early 2022. Simonson added the index has been accelerating each month since President Donald Trump imposed a 50% tariff on aluminum final June.

The index for metal mill merchandise, that are additionally beneath a 50% tariff, jumped 17% for the total 12 months 2025. That’s the steepest rise for the fabric since 2022, in response to the AGC launch.

“These increased costs at the moment are displaying up as nicely in the price of building gear and equipment,” stated Simonson. “That index rose 5.6% within the newest 12 months, essentially the most in two years.”

Simonson added the price of copper will certainly “go even increased this 12 months if the tariffs keep in place.”