The Producer Price Index (PPI) for materials and services used in nonresidential construction rose 0.1 percent from January and 3.1 percent compared to February 2025, driven by sharp increases in metal prices. An analysis by the Associated General Contractors of America (AGC) warned that rising costs are making it increasingly difficult for contractors and owners to proceed with planned projects.
“Major increases in the prices for diesel fuel and key metals occurred even before the escalation of the Iran conflict,” said Ken Simonson, the AGC’s chief economist. “The disruption of oil, natural gas, and aluminum supplies from the Middle East is pushing costs higher and forcing owners to delay projects.”
The PPI for aluminum mill shapes and steel mill products jumped 39.1 percent and 20.9 percent, respectively, from February 2025 to February 2026—the largest year-over-year increases since 2022. Other metal products also posted gains: fabricated structural metal bar joists and rebar rose 20.0 percent, while copper and brass mill shapes increased 15.1 percent.
Energy-related inputs also shifted. Diesel fuel prices jumped 20.3 percent from January, though they remain only 3.1 percent higher than a year ago. These costs ripple through the supply chain; the cost of truck transportation for freight increased 3.1 percent over the past year. Continued volatility in fuel markets could further push up transportation and operating costs if Middle East energy supply disruptions persist.
AGC officials noted that these rising costs highlight the sensitivity of construction supply chains to global disruptions and trade policy. They urged federal officials to take action to stabilize these critical markets.