Associated General Contractors Chief Economist Ken Simonson said ABC's figures are based on a producer price index that tracks goods inputs to construction.

He pointed to broader BLS measures that include both materials and certain services purchased by contractors, which rose 1.7% in May and 8.1% year over year. A comparable index for new nonresidential construction increased 1.8% during the month and 8.4% from a year earlier.

The increase comes amid a broader resurgence in producer inflation. The BLS reported its final-demand producer price index rose 1.1% in May, up 6.5% from a year earlier—the largest annual increase since November 2022. Nearly 80% of the monthly increase was attributable to higher energy costs.

"Construction input prices surged again in May and are now up nearly 10% year over year," ABC Chief Economist Anirban Basu said in a statement.

"Oil prices, pushed higher by the ongoing Iran conflict, made a significant contribution to the rise in overall materials prices, yet the greater concern is the continuing price growth in tariff-affected inputs like iron, steel and copper," Basu added.

Metals and Energy Drive Increases

The strongest price increases continue to occur in materials heavily used across industrial, infrastructure and data center projects.

The U.S. Bureau of Labor Statistics producer price index for metals and metal products rose from roughly 307 in January 2025 to nearly 380 in May 2026, reflecting sustained increases in construction-related materials such as steel, aluminum and copper. Associated Builders and Contractors reported copper wire and cable prices were up 24.2% year over year in May.

Chart: U.S. Bureau of Labor Statistics

Copper wire and cable prices climbed 7.3% in May and were 24.2% higher than a year earlier, according to ABC. Iron and steel prices increased 1.4% during the month and 7.0% year over year, while hot-rolled steel bars, plates and structural shapes remained 10.0% above year-earlier levels.

Federal producer-price data point to similar pressure across metals markets. Steel mill products were up 6.7% year over year, while copper and brass mill shapes increased 26.8% and aluminum mill shapes rose 48.8%.

Simonson said the latest escalation reflects both geopolitical and trade-related pressures.

"Clearly, the Middle East conflict is responsible for the 19.9% monthly rise and 105.9% year-over-year increase in the diesel fuel PPI, which in turn contributes to the rise in the trucking PPI and the fuel surcharges many contractors are now paying for deliveries," he told ENR in an email.

Simonson added that tariffs have contributed to rising prices for aluminum and copper products, as well as fabricated structural metal components. Truck freight transportation prices increased 17.3% year over year, according to BLS data, underscoring how higher energy costs are filtering through construction supply chains.

The acceleration arrives at a time when construction demand remains uneven.

ABC reported in May that contractor backlog rose to 8.8 months, the highest level in 10 months, largely due to continued data center investment. Contractors also remained broadly optimistic regarding sales, staffing and profit margins despite what Basu described as emerging materials price escalation.

That optimism contrasts with weaker spending data elsewhere in the market. Private nonresidential construction spending declined for a fourth consecutive month in January, according to an earlier ABC analysis, reflecting slowing manufacturing megaproject activity as several semiconductor projects moved toward completion.

Outside data centers, Basu said few sectors are generating enough momentum to offset that slowdown.

Contractors are also facing labor-cost pressures. Simonson noted that average hourly earnings for construction production and nonsupervisory workers rose 5.0% from May 2025, compared with a 3.6% increase for the private sector overall.

Combined with higher freight costs and continued escalation in metals prices, those pressures are adding strain across construction supply chains even as contractors maintain a generally positive outlook.

ABC's analysis of BLS producer price data shows copper wire and cable prices rose 24.2% over the past year, while crude petroleum increased 78.2%. Overall construction input prices climbed 2.6% in May and 9.6% year over year.