Construction Input Prices Rise 2.2 Percent in September
Contractors face tightening profit margins as elevated fuel and tariffed material costs impact project expenses.
Updated on Oct. 15, 2026 in Construction
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Construction input prices rose 2.2 percent in September, capping an 11.2 percent increase over the previous 12 months. This trend continues to affect nonresidential contractors as material costs and fuel expenses climb.
Why it matters
Rising costs for tariffed materials like iron and copper, combined with elevated fuel prices, are squeezing bottom lines across the construction sector. These mounting expenses have led a significant portion of operators to project lower profit margins in the near term.
Overall construction input prices rose 11.2% year-over-year, while monthly figures show a 2.2% increase alongside a 28.3% spike in crude petroleum costs. More than 1 in 4 contractors now expect profit margins to contract over the next six months.
The players
Associated Builders and Contractors
A national construction industry trade association representing thousands of member companies.
The details
Operating costs for contractors are being driven by a dual-factor crunch: the ongoing conflict in Iran inflating energy prices and the rising expense of metal products subject to tariffs. Unprocessed energy materials, including natural gas, rose 22.2% and 5.1% respectively in September, forcing firms to absorb higher procurement costs. These input price increases directly challenge the viability of fixed-price contracts and project bidding strategies currently in use.
Timeline
September 2025 marked the start of the 12-month period for year-over-year price analysis.
September 2026 saw a 2.2 percent monthly increase in construction input costs.
Over the next six months, contractors anticipate further profit margin contraction.
Market Landscape
The latest data from the Associated Builders and Contractors confirms a sustained inflationary trend in essential building materials. This development continues a documented pattern of volatile input pricing that has defined the construction industry over the past year.
Operators should review current supply contracts to identify potential clauses regarding material price escalations and fuel surcharges. Managing procurement timing and re-evaluating bids may be necessary to protect margins as these input costs remain elevated.
The takeaway
The sustained increase in input prices necessitates a conservative approach to project estimation and contract negotiation. Contractors should track the 28.3% rise in crude petroleum costs as a leading indicator for further project expense volatility in the coming months.
Further reading
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Source note: This article includes information reported by Tedmag.
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