The cost of key construction materials such as aluminum, steel, and copper saw significant increases in January, contributing to higher overall prices for nonresidential construction. According to the Associated General Contractors of America (AGC), the producer price index for materials and services used in nonresidential construction rose by 2.9 percent from January 2025 to last month. Meanwhile, overall construction spending decreased by 0.4 percent from December 2024 to December 2025.
Ken Simonson, chief economist at AGC, attributed much of the rise in material costs to tariffs on imported metals and products. “Although producer indexes are based on selling prices of domestic producers, the steep tariffs on imported metals and products are clearly enabling U.S. sellers to push up costs for construction materials and equipment,” said Simonson. “Providing domestic producers with greater certainty about future demand should encourage greater production and, ultimately, lower prices.”
Aluminum mill shapes experienced a year-over-year price increase of 33 percent while steel mill products rose by 20.7 percent—the largest annual jumps since early 2022’s supply-chain disruptions. Both indexes have increased each month since a presidential order imposed a 50 percent tariff last June. The index for copper and brass mill shapes also climbed by 15.7 percent over the same period; imported products containing copper face similar tariffs.
Government data showed mixed results across different segments of construction spending in 2025. Public construction grew by 3.4 percent but highway and street projects increased only slightly at 0.8 percent. Private nonresidential spending fell by 1.8 percent due mainly to an 11.4 percent drop in manufacturing-related projects, while private residential spending declined by 1.3 percent—single-family home building dropped by 3.6 percent but multifamily housing rose by 2.9 percent.
AGC officials emphasized that domestic suppliers need more certainty about future demand before expanding capacity for essential materials—a point reflected in their recent launch of the “America’s Moving Forward” campaign urging Congress to renew surface transportation funding before current legislation expires this September.
“It will be hard for suppliers to boost production if they have no idea about future demand for their products,” said Jeffrey D. Shoaf, chief executive officer of AGC. “Passing the surface transportation bill – the single largest federal construction measure – on time will give domestic suppliers the certainty they need to boost production and offset the impacts of tariffs.”
The Nevada Chapter of the Associated General Contractors of America supports Nevada’s construction sector through resources, advocacy efforts in civic affairs and state legislation, as well as involvement from general contractors, specialty contractors, suppliers, and service providers via several committees based out of Reno (official website).
