The Daily Dig
Construction input prices fell 1.1% in June compared to May, according to an Associated Builders and Contractors analysis of Bureau of Labor Statistics Producer Price Index data released July 15. Nonresidential construction input prices matched that decline, also dropping 1.1% for the month. Despite the monthly dip, prices remain well above where they stood a year ago. Overall construction input prices are up 7.6% year over year, while nonresidential input prices are up 7.4%.
Oil prices played the central role in June's decline. ABC Chief Economist Anirban Basu attributed the drop in aggregate prices to the steep fall in oil prices throughout the month. Crude petroleum prices dropped 12.1%, and unprocessed energy materials fell 8.1%. Natural gas moved the other direction, climbing 16.6% in June. Two of the three energy subcategories ABC tracks posted decreases for the month.
Basu cautioned that the reprieve may not hold. Conflict in Iran has resumed, and it has already triggered a roughly 15% rebound in oil prices. Tariff affected commodities including iron, steel, and copper continue to see steep price increases.
Basu noted that contractors remain optimistic about their margins, according to ABC's Construction Confidence Index. He warned that higher input costs will likely weigh on profitability during the second half of 2026.
Snapshot:
Report: ABC analysis of BLS Producer Price Index data
Release Date: July 15
Overall Construction Input Prices (Monthly): -1.1% (June vs. May)
Nonresidential Construction Input Prices (Monthly): -1.1% (June vs. May)
Overall Construction Input Prices (Year-Over-Year): +7.6%
Nonresidential Construction Input Prices (Year-Over-Year): +7.4%
Crude Petroleum Prices (Monthly): -12.1%
Unprocessed Energy Materials (Monthly): -8.1%
Natural Gas Prices (Monthly): +16.6%
Oil Price Rebound (Tied to Renewed Iran Conflict): ~15%
Commodities Flagged for Tariff Affected Increases: Iron, steel, copper
Source: ABC Chief Economist Anirban Basuasu
TheJobWalk Thoughts
June's dip shouldn't shape pricing strategy. Oil is already reversing on renewed conflict in Iran, so bids built on this month's numbers carry real exposure.
Iron, steel, and copper are tariff affected and climbing, separate from the energy swings driving the headline number. GCs and subs should track that cost pressure on its own line, especially on steel heavy scopes.
Basu's warning matters most for sales teams. Confidence is holding, but margin pressure is coming in the second half. That's worth raising with owners before it shows up in a bid.
