Construction material prices rose 1.3% in February and are up 3.1% on a year-over-year basis, according to Associated Builders and Contractors. Prices in February were 45.3% higher than in February 2020.
Nonresidential construction material prices also rose 1.3% in February and increased 3.7% compared with one year ago. Softwood lumber prices are up 4% for the month and down 1.7% year over year. Iron and steel prices are up 3.4% for the month and 15.3% year over year. Natural gas rose 10.9% in February and is up 30% year over year. Crude petroleum rose 4.7% for the month and is down 14.1% year over year.
“Construction materials costs surged in February due to significant increases in oil, copper, lumber and steel prices,” said ABC Chief Economist Anirban Basu. “Notably, this data does not reflect the precipitous increase in oil prices, which are near $100/barrel as of this morning, caused by the conflict in Iran. That will put upward pressure on construction materials prices directly by raising diesel prices and, indirectly, by raising the cost of shipping other inputs.
“While input prices are still up a relatively modest 3.1% since February 2025, they rose at a staggering 12.6% annualized rate during the first two months of 2026,” Basu continued. “Which is to say, materials price escalation could serve as a real headwind to construction activity over the next several months. Fewer than 1 in 4 contractors expect their profit margins to shrink over the next six months, according to ABC’s Construction Confidence Index. Those expectations will bear close monitoring if input prices continue their rapid ascent.”
