Source: US Department of Labor, Producer Price Index
The commercial sector is showing early signs of renewed activity, boosted in part by the surge in AI-related construction projects. Commercial building, which had been trending downward, has now leveled off for the year. Meanwhile, downward, has now leveled off for the year. Meanwhile, public construction is beginning to taper, as progress on infrastructure initiatives slows under the current administration. With economic uncertainty mounting and the prospect of new tariffs on the horizon, many firms are proceeding cautiously—pulling back on investment and preparing for the possibility of slower growth ahead.
CONSTRUCTION MATERIALS
Material costs continue to rise, with most indices showing average increases of about 5%. Key commodities—steel, aluminum, and copper—are up much more sharply, with annual gains of 20–30%. Although reporting agencies now show fewer discrepancies, most agree that tariffs are contributing to these trends, making it important to consult multiple data sources. Market uncertainty remains. Crude oil has fallen to $60 per barrel, which could eventually affect material pricing, but diesel costs are still 12–15% higher, leaving the overall impact on construction expenses uncertain.
SAND & GRAVEL
We continue to see a wide spread of data across reporting agencies, likely influenced by the regional nature of quarry operations. While some sources are reporting increases of more than 20%, others show gains of only 2%. These discrepancies are unusual, making it especially important to verify pricing with local suppliers. This is a category worth watching closely.
CONCRETE
Concrete had followed a consistent trajectory since late 2020, with annual price increases holding steady at about 6%—a contrast to its more volatile component materials. Recently, however, concrete prices have flattened, marking a notable slowdown compared to the past five years. This shift may reflect the newfound stability in the price of Portland cement.
PLUMBING FIXTURES
The cost of plumbing fixtures, which had surged in prior years, briefly stabilized last year but is now climbing again—up roughly 6%. Over the past five years, this category has averaged about 5% annual growth. It remains uncertain whether the latest increases are being driven in part by the current tariff environment.
CONCRETE BLOCK (CMU)
After averaging price increases of more than 8% annually over the past five years – including two consecutive years of 17% spikes in 2022 and 2023 – concrete block costs have finally stabilized. Over the past 12 months, prices have risen a more modest 2%, suggesting a period of relative calm in this category.
PRECAST CONCRETE
Precast had been tracking closely with concrete block trends, posting average annual gains of around 8% from 2019 through 2025. In 2024, however, its growth slowed sharply to just 1%—despite rising costs in its component materials. Now, precast is breaking from that pattern, recording a more moderate year-over-year increase of 4%.
