Core Summary

  • According to the latest economic data analysis released by the Associated Builders and Contractors (ABC) on Wednesday, construction input prices fell 1.1% month-over-month in June, but costs may rise again in the coming months.
  • ABC Chief Economist Anirban Basu said that the drop in oil prices in June drove overall material costs down month-over-month, but with the ongoing conflict in Iran, energy prices will come under pressure again in the short term.
  • Basu said in a press release: "The likelihood of continued increases in material prices over the coming months is elevated. The conflict in Iran has reignited, pushing oil prices up by about 15%, while prices for commodities such as iron, steel, and copper, which are affected by tariffs, continue to rise significantly."

In-Depth Analysis

Basu noted that the new pressure from rising input costs "could weigh on contractors' profitability in the second half of 2026."

According to ABC's analysis, two of the three energy subcategories saw month-over-month price declines in June, with crude oil prices falling 12.1% and unprocessed energy material prices dropping 8.1%. In contrast, natural gas prices rose 16.6% during the month.

The ABC report showed that the steel price index rose 2.5% month-over-month in June. Other commodities, such as steel mill products and copper wire, also increased by 3.6% and 1.7%, respectively.

Despite the month-over-month decline in energy costs in June, overall construction input prices were still 7.6% higher than the same period last year. Nonresidential construction input prices were 7.4% higher year-over-year.

Ken Simonson, chief economist of the Associated General Contractors of America (AGC), pointed out that the June index data was collected nearly five weeks ago and reiterated that fuel prices have already risen during that period. He also highlighted the broader context of current input prices compared to 2025.

Simonson said: "Although fuel prices fell in June, they remain well above the same period last year. Additionally, high tariffs on aluminum, steel, and copper-containing products continue to drive up construction costs."