Source: US Department of Labor, Producer Price Index
The commercial sector has shown early signs of renewed activity but appears to be losing momentum, with limited broad-based gains. The AI data center surge remains localized and has not materially lifted the overall market, while construction employment is essentially flat. At the same time, public construction is beginning to taper but remains relatively steady. Because public spending represents roughly 25% of total construction activity, a sustained recovery will depend on a reversal in private investment. For now, many firms are proceeding cautiously, scaling back investments and preparing for slower growth.
CONSTRUCTION MATERIALS
Material costs continue to edge upward, with most price indices showing average annual gains of approximately 3–3.5%. However, some commodities – particularly steel, aluminum, and copper – have experienced much sharper year-over-year increases of 20–30%. While differences among reporting agencies had been narrowing, recent divergences suggest continued uncertainty, particularly amid ongoing tariff questions.
COMMON BRICK
Brick prices have increased by about 2% over the past year, signaling a move toward stabilization after post-2020 gains that averaged roughly 8% annually. While some indexes indicate stronger increases, the overall trend suggests moderation; local market conditions should be reviewed carefully.
GYPSUM PRODUCTS
Gypsum pricing is leveling off, rising about 1% annually and only 3% over the past three years. This marks a significant shift from earlier double-digit increases and suggests reduced volatility compared with prior years.
ASPHALT
Asphalt prices have been essentially flat over the past two years, though notable spikes have occurred, reflecting the material’s close linkage to crude oil markets.
STRUCTURAL STEEL
After more than doubling between 2020 and 2022, structural steel prices began to correct downward. More recently, prices have risen about 12%, largely due to tariffs, with reporting agencies generally aligned on this trend.
LUMBER
Lumber pricing appears to be stabilizing after five years of significant volatility. While disparities remain between standard 2x4s and larger dimensions, weaker housing demand has softened overall market pressure, pointing to a more subdued outlook.
