Construction input prices fell by 0.1% in April, offering limited relief to contractors, though prices remain significantly elevated compared to pre-pandemic levels. According to the Associated Builders and Contractors (ABC), material costs are now 41.3% higher than in February 2020.
Key Highlights:
- Overall construction material prices fell 0.1% from March to April 2025.
- Prices are up just 0.1% year-over-year, signaling a possible stabilization.
- Nonresidential input prices rose 0.2% monthly and annually.
- Softwood lumber increased 8.6% YoY, but declined 2.6% month-over-month.
- Iron and steel prices rose 2% YoY and 2.3% for April.
- Natural gas prices dropped 7.1% for the month, but surged 142.7% YoY.
- Crude petroleum fell 4.9% for April, down 22.6% from last year.
- Steel mill products and copper wire saw sharp increases: 5.9% and 5.0%, respectively.
Expert Insight
ABC Chief Economist Anirban Basu attributed April’s overall price decline primarily to falling energy prices, noting that materials impacted by tariffs—such as steel and copper—actually experienced sharp cost increases.
“While recent developments have reduced tariff-related uncertainty, the 25% tax on steel and aluminum imports remains in place,” Basu stated. He warned that a potential increase in imports from China could lead to higher shipping and material costs in coming months.
Despite persistent cost pressures, only 1 in 4 contractors expect profit margin declines over the next six months, according to ABC’s Construction Confidence Index.
Conclusion
April’s modest dip in input costs brings a mixed outlook for the construction industry. While energy prices helped ease the burden, ongoing tariff policies and volatile material prices remain key concerns heading into the second half of 2025.
[1] NRCA
