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The cost of materials and services used in nonresidential construction posted its steepest annual increase in two-and-a-half years, according to federal data published yesterday by the\u00a0<\/p>\n
The\u00a0\u00a0for nonresidential construction inputs climbed 0.5% in July and 2.6% from the same month in 2024, marking the largest 12-month gain since February 2023, according to AGC\u2019s chief economist, Ken Simonson.<\/p>\n
Simonson said in a statement that \u201cSteep tariff increases earlier this year on aluminum and steel, along with a more recent tariff on raw copper, drove the producer price index for construction inputs higher for the third straight month.\u201d<\/p>\n
\u201cEven though contractors do not generally import materials directly, it is clear that domestic producers are raising prices in line with the protection tariffs are providing them,\u201d Simonson added.<\/p>\n
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The administration raised tariffs on\u00a0\u00a0from 25% to 50% on July 4, while a new 50% tariff on raw copper took effect on August 1.<\/p>\n
Additional\u00a0from nearly all major construction material suppliers began in early August, creating expectations for further price increases in the months ahead.<\/p>\n
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AGC officials said that contractors are being squeezed between rising material costs and slowing demand in certain private-sector markets, which are being weighed down by high interest rates and economic uncertainty.<\/p>\n
\u201cThis administration has acted quickly to craft\u00a0, but several outstanding deals are leaving\u00a0\u00a0saddled with higher materials prices as tariff levels remain high,\u201d said Jeffrey D. Shoaf, AGC\u2019s CEO.<\/p>\n
\u201cFinalizing these negotiations could ease some of the pricing pressure and help stabilize the market.\u201d<\/p>\n
For construction firms, the combination of heightened tariffs, slowing demand, and increased financing costs presents a challenging business environment heading into the fall building season.<\/p>\n
ConstructConnect and the\u00a0. Ken Simonson is regularly featured on ConstructConnect\u2019s \u00a0with ConstructConnect Chief Economist Michael Guckes and other special guests.<\/strong><\/p>\n<\/p><\/div>\n