Construction input costs climbed 11.9% between September 2025 and September 2026, the steepest 12-month rise in four years, according to the Associated General Contractors of America’s read of the latest producer price data. Fuel did a lot of the damage. Metals did the rest, and the steel problem now looks like supply, not just price.
The Bureau of Labor Statistics released the September producer price index Oct. 15. Final demand prices rose 1.3% for the month and 6.3% over the year, per BLS. AGC’s same-day analysis tracks the index for inputs to new nonresidential construction, which covers materials plus services like trucking and energy.
Where construction input costs rose fastest
Diesel at the refinery and terminal level was up 115.2% year over year. Truck freight rose 19.3% as carriers passed fuel through, and liquid asphalt was up 17.7%. Paving contractors bidding 2027 lettings now carry all three.
Metals ran hotter than anything but fuel. Copper and brass mill shapes rose 30%, steel mill products 27.6% and aluminum mill shapes 25.2%. AGC ties those to tariffs of up to 50% imposed on metals in 2025.
The number that tells you the increases are spreading is precast. Precast concrete products with embedded steel were up 10.5%, a sign that the metal premium is now riding along inside fabricated products that don’t look like a steel buy on the estimate.
Two producer price readings, same direction
Associated Builders and Contractors published its own analysis the same day and got slightly different numbers. ABC put overall construction input prices up 2.2% for September alone and 11.2% over the year, with nonresidential inputs up 2.3% for the month, as reported by tED magazine. The two groups pull from different BLS input series, so the gap isn’t a contradiction. Both land a little above 11%.
ABC chief economist Anirban Basu put much of the rise on fuel tied to the conflict in Iran, and said prices for tariffed materials like iron and copper “continue to rise rapidly.” A one-month 2.2% jump is large by any standard. Last month’s data showed diesel near $6.45 a gallon, and September didn’t bring relief.
Steel lead times are the bigger construction cost risk
Price is one thing. Availability is another. AGC says producers of beams and steel shapes report order books filled through spring 2027, that some contractors have been told they’ll get a small fraction of the beams they ordered, and that alternative suppliers are turning away new customers. That matches what developers saw this summer when steel lead times doubled to 55 weeks.
AGC chief economist Ken Simonson called it “a double whammy of tariff- and war-induced materials cost increases” and said longer steel lead times make schedules harder to hold. The association also says most firms are eating the increases because demand outside data centers is soft. That can’t last on fixed-price work signed a year ago. Expect more escalation clauses, more early mill orders and more owners asking about alternate structural systems before the October numbers land Nov. 13.