Update: Construction Input Prices Up 11.2% in September, Most in Nearly 4 Years

Update: Prices for the materials and energy that go into construction rose 2.2% in September and were up 11.2% from a year earlier, according to an Associated Builders and Contractors (ABC) analysis of the federal producer price data released this morning. ABC's chief economist called it the largest year-over-year increase in nearly four years. This adds the construction-specific detail that was not yet available when we first reported on the September Producer Price Index earlier today.

Our earlier post covered the headline numbers: U.S. producer prices rose 1.3% in September and 6.3% from a year earlier. At that time, the industry breakdown for construction inputs had not been published. ABC has now released it.

What Happened

ABC reviewed the U.S. Bureau of Labor Statistics Producer Price Index data released on October 15 and reported that overall construction input prices rose 2.2% in September compared with August (Rock Products). Nonresidential construction input prices rose 2.3% for the month (Rock Products).

Over the 12 months from September 2025 to September 2026, both overall and nonresidential construction input prices rose 11.2% (Contractor).

What Is Confirmed

• Monthly pace nearly doubled. In August, ABC reported overall construction input prices up 1.2% for the month and 8.9% from a year earlier, with nonresidential inputs up 1.2% and 8.8% (Red Book Lumber Data). September's 2.2% monthly gain and 11.2% annual gain are both higher.
• Energy led the increase. Crude petroleum prices were up 28.3% year over year and unprocessed energy materials were up 22.2%, while natural gas rose 5.1% for the month (Rock Products). In August, natural gas had fallen 11.6% (Red Book Lumber Data).
• Metals continue to climb. ABC Chief Economist Anirban Basu said prices for tariffed materials such as iron, copper and other metal products "continue to rise rapidly" (Rock Products).
• Fuel is a major driver. Basu attributed a substantial part of the increase to higher fuel prices tied to the conflict in Iran (Contractor).
• Margins are under pressure. Basu noted that more than 1 in 4 ABC contractors expect their profit margins to contract over the next six months, based on ABC's Construction Confidence Index (Rock Products).

What Is Not Yet Known

The coverage reviewed for this update does not list September changes for individual materials such as steel mill products, copper wire and cable, aluminum, softwood lumber or ready-mix concrete. Those detailed indexes are part of the BLS release, and more analysis from industry groups may follow. We will not estimate those figures here.

What It Means for Owners and Contractors

An 11.2% annual rise in input costs is large enough to affect bids that were priced even a few months ago. A project estimated in the spring may now carry material and fuel costs well above its original budget, especially on work with heavy steel, copper or diesel exposure.

• Owners should review contingency levels on projects that have not yet been bought out, and expect shorter bid validity periods and more requests for escalation clauses or material price adjustment provisions.
• General contractors should confirm that subcontractor and supplier quotes are current, lock in pricing on long-lead metal items where possible, and track fuel costs on equipment-heavy scopes such as sitework and paving.
• Subcontractors working under fixed-price contracts signed before the late-summer run-up should review what their contracts allow for documented cost increases.

What to Watch

Watch for further industry analysis of the detailed construction indexes in the September release, the direction of diesel and crude prices given their role in this month's jump, and whether ABC's next Construction Confidence Index shows more contractors expecting margins to shrink. The next monthly Producer Price Index release will show whether September marked a peak or a further step up.

Image credit: Associated Builders and Contractors (ABC). Image from the source article.

Sources

• Rock Products, "ABC: Construction Materials Prices Have Exploded Since 2020," https://rockproducts.com/2026/10/15/abc-construction-materials-prices-have-exploded-since-2020/
• Contractor, "Producer Price Index Surge Signals Rising Construction Costs, Shrinking Margins," https://www.contractormag.com/construction-data/news/55412113/producer-price-index-surge-signals-rising-construction-costs-shrinking-margins
• Red Book Lumber Data, "ABC: Construction Materials Prices Jump Again in August," https://www.redbooklumberdata.com/2026/09/14/abc-construction-materials-prices-jump-again-in-august/