Construction Material Prices Are Up 11% in a Year. Here Is How to Price Bids Now

Construction input prices rose 2.2% in September 2026 and are now 11.2% higher than a year ago, according to Associated Builders and Contractors' analysis of the Bureau of Labor Statistics Producer Price Index released October 15. Nonresidential inputs rose 2.3% for the month. That is the largest 12-month increase in nearly four years. AGC's own read of the same data puts the year-over-year jump at 11.9%.

If you priced a job in the spring and are still holding that number, it is probably light.

What Pushed Prices Up in September

Two forces are working at the same time.

The first is energy. Crude petroleum prices are up 28.3% from a year ago and unprocessed energy materials are up 22.2%. ABC attributes a large share of the September increase to higher fuel prices tied to the conflict in Iran. Fuel reaches every job: diesel for equipment, asphalt, delivery charges, and any product made with high heat.

The second is tariffed metals, which keep climbing. Steel and aluminum carry Section 232 tariffs of up to 50%, and copper products carry a 50% tariff. Domestic mills price close to the tariffed import level, so specifying domestic material does not get you out from under it.

AGC also reports that increases are now spreading past fuel and metals into other goods and delivery costs. A month earlier, ABC had already flagged iron and steel, softwood lumber, switchgear, and copper wire and cable as up more than 10% year over year.

Which Materials Moved the Most

BLS producer price indexes, August 2026 compared with August 2025:

Market prices show the same direction. Hot-rolled coil steel futures traded at $1,317 per ton on October 6, up 63.6% from a year earlier. Copper futures hit an all-time high of $6.85 per pound in September.

What this means by trade:

• Concrete and structural: rebar, embeds, structural steel, metal deck and miscellaneous metals all sit in the steel line. Ready-mix and placement also carry diesel and delivery exposure.
• Electrical: copper wire and cable, conduit and switchgear are among the fastest-rising items, and electrical labor is the tightest trade because of data center demand.
• Sitework: equipment fuel, haul and asphalt follow oil prices more than tariffs.
• Wood framing and finishes: softwood lumber has carried a 10% Section 232 duty since October 2025 on top of duties on Canadian lumber. Kitchen cabinets and vanities have carried a 50% tariff since January 1, 2026.

Costs Are Rising While Most of the Market Is Not

Total US construction spending was $2.203 trillion (seasonally adjusted annual rate) in August, up 0.9% from July but 1.7% below a year earlier.

The averages hide a split. Data center construction spending is up 73% year over year. All other private nonresidential spending combined is down 5.9%, and private office work outside data centers is down 9.4%.

So outside data centers and power, there are fewer projects to chase and more bidders on each one. That is the squeeze: input costs climb, but bid prices on ordinary commercial work do not climb with them. More than one in four contractors in ABC's Construction Confidence Index expect their profit margins to shrink over the next six months.

Labor adds to it. Average hourly construction earnings reached $41.69 in September, up 4.2% from a year ago, with the industry unemployment rate at 3.5%. In the AGC and NCCER workforce survey, 82% of contractors said they are struggling to fill hourly craft positions, and data center projects are pulling electricians and other specialty trades away from everything else.

What to Change in Your Estimates Now

None of this requires a new process. It requires treating material pricing as perishable.

• Date every number. Supplier quotes for steel, copper, wire and electrical gear should carry a validity date, and anything older than about 30 days should be re-quoted before bid day. Unit costs from last quarter's database are not a safe default right now.
• Break out volatile materials. Carry rebar, structural steel, wire, conduit and switchgear as their own line items instead of folding them into assemblies. You can re-price them in minutes, and the owner can see exactly where escalation sits.
• Show escalation as its own line. Do not bury it in contingency. Base it on the item's own price trend and the time between bid and expected buyout.
• Ask for an escalation clause. On jobs with a long gap between bid and procurement, propose a material price escalation clause tied to a published index, such as the relevant BLS PPI series, with a defined trigger threshold. Owners accept these more readily when the clause is specific.
• Buy early on long-lead items. Once a job is awarded, release switchgear, structural steel and other volatile packages as early as the schedule allows, and consider deposits to hold pricing.
• Recheck fuel-driven costs. Equipment rates, trucking, asphalt and supplier delivery surcharges move with diesel. A sitework number built when oil was cheaper needs a second look.
• Price alternates where the spec allows. Alternate products or sources give the owner a way to protect the budget without asking you to absorb the increase.

The contractors who get hurt in a run like this are usually not the ones who missed a quantity. They are the ones who carried a three-month-old unit price into a bid that was awarded two months later.

If you have a bid going out and want the takeoff and material pricing checked against current costs, Urban Estimation prepares quantity takeoffs and cost estimates for US general contractors and subcontractors across all CSI divisions. Send us the drawings and the bid date.

Sources

• ABC: Construction Materials Prices Jump 2.2% in September, Up 11.2% Year Over Year
• ABC: Construction Materials Prices Jump Again in August (via Red Book Lumber Data)
• AGC Newsroom
• AGC Data DIGest, Sept. 28 to Oct. 2, 2026
• Construction Material Prices Since the Tariffs (BLS PPI data)
• 100 Construction Material Price Statistics 2026, EngiMarket
• US Construction Spending, August 2026 (Census data)
• Construction Futures: October 2026 Economic Roundup, Construction Executive
• US Commercial Construction Growth Slows as AI Data Centers Drive Market, Risk & Insurance