Construction materials costs climb

U.S. construction materials prices climbed again in March, as building industry groups warned of soaring costs and potential project cancellations resulting from the Trump administration’s trade tariff escalation.

Overall construction materials and services costs rose a half-percentage point in March from the prior month, on top of monthly increases in February and January, according to an analysis of federal data by the Associated Builders and Contractors trade group.

“Construction input prices increased at a rapid pace for the third consecutive month in March,” said Associated Builders and Contractors Chief Economist Anirban Basu in a statement. “The emerging effects of tariffs are glaring in the [latest] data release.”

Prices increased at an annualized rate of 9.7% in the first quarter of 2025, largely due to sharp month-over-month increases in the cost of lumber, iron, steel and copper, according to the trade group. Materials and services are 41.6% higher than February 2020. While contractors remain busy for the time being, "this pace of input price escalation, coupled with rising uncertainty, will cause projects to be delayed and canceled if it persists for any meaningful length of time,” Basu said.