Construction materials costs have risen once again in March by 0.5%, making it the third month in a row, according to an analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index by Associated Builders and Contractors (ABC). The hike stems from tariff uncertainties clouding purchasing and pricing strategies, causing pressure to ramp for builders and prospective homeowners alike.
Flat steel square pipes used in construction and industrial projects. Photo via Shutterstock.
The notices for the price hikes started popping up in March, even prior to the new tariffs taking effect. Construction materials costs for residential and non-residential building projects are now up a total of 0.8% from this time last year, and market volatility makes it difficult to predict when the rise will stagnate. As tariff and reciprocal tariff plans turn on a dime, construction suppliers are forced to inaccurately predict the market.
Across the industry, budgeting and planning for projects is becoming increasingly complex, according to economists. Many businesses are attempting to lock in pricing early with accelerated procurement, and proactivity is the name of the game to protect businesses’ bottom line. Project leads, construction executives, and estimators are feeling the squeeze as each month brings a new brace of additional price hikes.
“Construction input prices increased at a rapid pace for the third consecutive month in March and have now risen at a 9.7% annualized rate through the first quarter of 2025. The emerging effects of tariffs are glaring in the March data release, with iron and steel, steel mill products and copper wire and cable prices all rising more than 5% for the month,” says ABC Chief Economist Anirban Basu.
According to ABC, the pace of increased construction materials costs and market uncertainty will cause project delays and cancellations if the tariff pressure fails to subside. This increase period marks the first time that input prices have jumped three consecutive months since September 2023, and companies are urging the Trump administration to consider a new approach at least until the market sees greater certainty.
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