Seven point one percent. Same as last month. That’s the part everyone will report, and it’s the least interesting number in the release.
The Bureau of Labor Statistics published July Producer Price Index data on August 13. The Associated General Contractors of America’s same-day analysis put the index for inputs to new nonresidential construction up 7.1% from July 2025, matching June’s year-over-year reading exactly. Headline final-demand PPI was unchanged for the month.
A flat average hiding a moving distribution
Underneath the steady annual rate, AGC found numerous individual input prices accelerating to multi-year highs. That’s a different problem from broad inflation, and it’s harder to hedge.
Broad escalation is what escalation clauses are built for. A clause indexed to a general construction cost measure tracks a general construction cost measure. But when the pain concentrates in three or four commodities while everything else sits flat, the index barely moves and the contractor buying those specific commodities eats the difference. Aluminum, copper and steel have been the drivers all summer. Anyone with heavy electrical or structural scope is not experiencing a 7.1% year.
AGC tied the acceleration to war and tariffs, and used the release to press for reduced and stabilized tariffs on key materials and for Congress to finish work on highway and transit funding.
What to do with it
June gave contractors a brief reprieve when an oil-driven decline pulled the monthly figure down. That reprieve is over, and the war component puts energy-linked inputs back in play, which reaches further than the obvious fuel line items. Asphalt, plastics, coatings and anything with a long freight tail all move with energy.
The practical move is to stop pricing escalation risk at the index level and start pricing it at the commodity level. A GMP negotiated against a general index while the exposure sits in copper is a bet, not a hedge.
Two consecutive months at 7.1% will read as stability to owners. It isn’t.
Cast-in-place and heavy structural jobs feel it first. See Rowan, a 16-story, 610,000-square-foot concrete tower in Denver on a 28-month build.