3Q 2025 Cost Report: Prices Rise as Delayed Impacts of Tariffs Hit Jobsites

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The producer worth index for supplies and providers utilized in nonresidential building rose 0.2% in August and a pair of.5% from the identical month in 2024, pushed by will increase in metal and aluminum prices, in line with an evaluation by the Related Basic Contractors of America of presidency knowledge launched by the U.S. Bureau of Labor Statistics on Sept. 10.

AGC and survey companion Nationwide Heart for Development Training Analysis discovered rising prices have been a key purpose for delayed, canceled or scaled-back tasks, such because the $200-million, 32-story The Edison mass-timber tower in Milwaukee now paused by builders.

“I count on tariffs will put upward strain on the price of building supplies over the following a number of months,” mentioned Kenneth Simonson, AGC chief economist. “The impacts have been restricted up to now due to stockpiling and delayed efficient dates for a lot of tariffs, in addition to softening demand for tasks,” he mentioned.

Demand has softened, Simonson mentioned, partially due to tariffs themselves, and likewise uncertainty about what could be coated, when, and for a way lengthy.

The AGC-NCCER evaluation discovered that 43% of contractors reported at the least one mission prior to now six months had been canceled, postponed or scaled again due to greater prices.

The producer worth index for aluminum mill shapes elevated 5.5% final month and 22.8% from August 2024. The index for metal mill merchandise rose 1.5% in August and 13.1% over 12 months. The index for lumber and plywood elevated .5% for the month and 4.8% year-over-year.

AGC mentioned two in 5 building firms reported elevating their very own costs in response to tariffs, and plenty of accelerated purchases to get forward of additional hikes.

One other 16% mentioned that they had absorbed greater prices themselves or labored with suppliers to share the burden. Almost 40% of contractors mentioned they count on supplies prices to climb additional within the months forward.

Producer Worth Index, August 2025	1 -Month % Change	12-Month % Change	Change Since Feb 2020
Inputs to Industries
Inputs to building	0.2%	2.3%	43.0%
Inputs to multifamily building	0.2%	2.5%	43.2%
Inputs to nonresidential building	0.2%	2.6%	43.9%
Inputs to business building	0.3%	3.6%	45.8%
Inputs to healthcare building	0.3%	3.4%	45.3%
Inputs to industrial building	0.3%	3.2%	41.3%
Inputs to different nonresidential building	0.2%	2.4%	43.4%
Inputs to upkeep and re air building	0.1%	2.0%	40.9%
Commodities
Adhesives and sealants	0.0%	3.0%	39.4%
Brick and structural clay tile	0.1%	1.4%	32.8%
Concrete Merchandise	0.0%	1.7%	41.7%
Development equipment and gear	0.5%	4.0%	35.3%
Development sand, gravel and crushed stone	0.1%	6.1%	47.5%
Copper wire and cable	-3.8%	13.8%	60.2%
Crude petroleum	-2.8%	-13.5%	36.1%
Fabricated structural steel merchandise	0.8%	5.9%	60.8%
Gypsum merchandise	0.0%	0.9%	48.7%
Scorching rolled metal bars, plates, and structural shapes	4.8%	6.5%	51.0%
Insulation supplies	-0.1%	0.1%	46.1%
Iron and metal	1.1%	9.2%	54.3%
Lumber and wooden merchandise	0.2%	1.8%	26.4%
Pure fuel	-2.8%	42.3%	43.3%
Plumbing fixtures and fittings	0.3%	8.2%	29.5%
Ready asphalt, tar roofing and siding merchandise	2.2%	6.1%	49.6%
Softwood lumber	0.6%	5.2%	14.4%
Metal mill merchandise	1.5%	13.1%	66.1%
Switchgear, switchboard, industrial controls gear	0.1%	10.5%	63.2%
Unprocessed vitality supplies	-2.5%	-4.8%	52.2%
Supply: U.S. Bureau of Labor Statistics

Absorbing the Influence

An evaluation of the identical knowledge by the Related Builders and Contractors famous that the value will increase would have been worse if contractors had not been in a position to reap the benefits of decrease costs for gasoline.

“Development supplies costs rose modestly in August, though the rise would have been bigger if not for declining oil and pure fuel costs,” mentioned ABC Chief Economist Anirban Basu. “Costs rose at an particularly speedy tempo in some classes most affected by tariffs.” He mentioned iron and metal costs, are up 9.2% year-over-year, whereas copper wire and cable costs rose 13.8%. Nonresidential enter costs have been up at a 5.3% annualized price in 2025, however contractors are broadly optimistic about their revenue margins over the following six months, says ABC’s Development Confidence Index.

Crude petroleum and pure fuel costs fell 2.8%, whereas unprocessed vitality supplies costs decreased 2.5% in August, in line with an ABC evaluation of the PPI knowledge. Contractors are typically optimistic about the remainder of the 12 months and 2026, however the influence of tariffs and better costs looms over future buying.

ABC’s Development Confidence Index for gross sales and revenue margins declined in July, whereas the studying for staffing ranges rose to the very best degree since April. The readings for all three stay above 50, indicating expectations for development over the following six months.

On the design aspect, the American Institute of Architects/Deltek Structure Billings Index, which has at the least a one-year lag between billings and building, stays detrimental at 46.2 in July.

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