The Associated General Contractors of America reported that the producer price index for materials and services used in nonresidential construction increased by 0.4 percent in November and 3.6 percent over the past year, marking the fastest annual rise since January 2023. The association’s analysis is based on government data released this week.
Ken Simonson, chief economist for the association, said, “Input costs for construction are rising faster than for producers or consumers in general, partly because the industry is faced with steep tariffs on many materials. Although many contractors are accelerating purchases and attempting to pass along cost increases, their bid prices have not kept up, rising only 2.7 percent in the past 12 months.”
Simonson highlighted that aluminum mill shapes, which face a 50 percent tariff, saw prices increase by 28 percent from November 2024 to last November. Steel mill products—also under a 50 percent tariff—rose by 4.6 percent during the same period. Certain steel items experienced higher increases: fabricated structural metal bar joints and rebar climbed by 16.6 percent.
A recent survey conducted by the association with Sage found that more than half of contractors (53 percent) identified material costs as a primary concern heading into 2026. Other major worries include an economic slowdown or recession (62 percent), as well as issues related to labor availability, quality, and cost.
Regarding tariffs’ impact on business practices, only one-quarter of contractors said they were unaffected by tariffs. Forty percent reported raising bid prices due to actual or anticipated tariffs; thirty-five percent passed most or all tariff-related costs onto project owners; and thirty-two percent accelerated purchases to avoid future tariffs.
Jeffrey D. Shoaf, chief executive officer of the Associated General Contractors of America, stated: “The frequent increases and announcements about prospective tariffs have pushed up the cost of construction and made owners hesitant to commit to projects. Contractors and owners alike need more certainty and fewer price shocks from tariffs to assure a healthy construction market in 2026.”
The Associated General Contractors of America Nevada Chapter serves as a trade association for general contractors, subcontractors, suppliers, and service providers across Nevada (official website). It supports its members through advocacy efforts—including government affairs committees—professional development opportunities, ethical standards promotion (official website), safety education programs (official website), workforce development partnerships with educational institutions (official website), networking events (official website), and award programs recognizing excellence in construction (official website). The chapter has been chartered since 1939 to represent contractors statewide (official website) and operates administrative offices in Reno (official website). It is affiliated with the national Associated General Contractors of America organization (official website).
View producer price index data.
