The Associated General Contractors of America reported a 0.8 percent increase in the cost of materials and services for nonresidential construction from December to January, marking the largest rise in the past year. This analysis, based on government data, highlights concerns over impending tariffs on steel and aluminum.
Ken Simonson, chief economist for the association, warned that "input costs are likely to jump even more if the Trump administration goes ahead with the tariffs it has threatened to impose." He pointed out that contractors with fixed-price projects could face financial pressure due to rising material costs. The producer price index for new nonresidential construction rose by 0.3 percent in January and 1.7 percent over the last year.
Cement prices increased by 3.2 percent annually, while ready-mixed concrete saw a 4.1 percent rise. Asphalt paving mixtures experienced an 8.6 percent increase. On the metals front, aluminum mill shapes climbed by 9.7 percent and copper and brass mill shapes surged by 12.3 percent over the past year.
The association expressed concerns about future cost increases following a new 25 percent tariff imposed by the Trump administration on steel and aluminum products, which may lead to higher construction project expenses or delays.
Jeffrey Shoaf, CEO of the Associated General Contractors of America, stated: “The math is pretty simple; the more contractors have to pay for the materials they need, the more it will cost to build new infrastructure, housing and economic development projects.” He emphasized that increasing domestic manufacturing capacity should not come at the expense of stifling construction activity.