WASHINGTON, DC — On October 15 the Bureau of Labor Statistics released its latest Producer Price Index data. Headline PPI rose 1.3% month-over-month (seasonally adjusted), marking the largest monthly advance since March 2022, and 6.3% year-over-year.

Construction input prices increased 2.2% in September compared to the previous month. Both overall and nonresidential construction input prices rose 11.2% between September 2025 and September 2026.

Energy prices remain volatile; crude petroleum and unprocessed energy materials prices increased 28.3% and 22.2%, respectively, while natural gas prices increased 5.1% for the month.

Contractors Expect Shrinking Margins

“Construction input prices have risen more than 11% over the past 12 months, the largest year-over-year increase in nearly four years,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “While higher fuel prices brought about by the conflict in Iran have driven a substantial portion of the increase, prices for tariffed materials like iron, copper and other metal products continue to rise rapidly.

“In light of this precipitous and ongoing increase in materials prices, it is unsurprising that more than 1 in 4 ABC contractors expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index.”

Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings and the Producer Price Index.