The cost of construction materials in the United States continued to rise in August, with significant increases reported for steel, aluminum, and lumber. According to the Associated General Contractors of America (AGC), analysis of government data shows that the producer price index for materials and services used in nonresidential construction rose by 0.2 percent in August and is up 2.5 percent compared to August 2024.
AGC officials highlighted that a recent survey conducted with NCCER revealed that rising costs have led to delays, cancellations, or reductions in project scopes across the industry. "The huge increases in steel and aluminum tariffs appears to have enabled domestic producers to push up their selling prices," said Ken Simonson, the association’s chief economist. He also pointed out that "the AGC-NCCER survey found that 43 percent of contractors reported at least one project in the past six months had been canceled, postponed or scaled back because of higher costs. These price increases are prompting some owners to rethink planned construction projects."
Tariffs on steel and aluminum were increased to 50 percent on June 4 after an earlier hike to 25 percent on March 12. Copper products faced a similar increase beginning August 1. In early August, broader tariffs affecting most imports from major suppliers were introduced, leading industry experts to anticipate further material cost increases.
Among specific inputs, the producer price index for aluminum mill shapes rose by 5.5 percent last month and is up 22.8 percent year-over-year. Steel mill products increased by 1.5 percent in August and climbed by 13.1 percent over the past twelve months. Lumber and plywood prices went up by 0.5 percent during the month and have risen by 4.8 percent since last year.
The AGC-NCCER survey indicates many contractors are responding by raising their own prices—two out of five firms reported doing so—and accelerating purchases ahead of anticipated hikes. Another portion of firms stated they absorbed higher costs or worked with suppliers to share expenses, while nearly four out of ten expect further material cost increases soon.
Association officials acknowledged progress made by the Trump administration in resolving trade disputes with several countries but called for resolution of ongoing disagreements with China, Canada, Mexico, and others to reduce tariff rates and stabilize material prices.
"There is a limit to how many price increases the market can absorb before owners put projects on hold," said Jeffrey D. Shoaf, chief executive officer of AGC of America. "The more the administration does to resolve trade disputes, provide more certainty and lower punitive tariff levels, the more demand for construction should rebound."
Further details are available through AGC's analysis of producer price index data as well as results from the AGC-NCCER survey.