Prices of construction machinery and equipment increased 0.3% in January compared to December 2024, and were 0.8% higher than January 2024, according to Associated Builders and Contractors. Equipment prices are 30.5% higher than they were in pre-Covid February 2020.
Overall construction prices rose 1.4% in January, up 1.3% since last January.
“Materials prices increased at the fastest monthly pace in two years in January,” said Anirban Basu, chief economist, in a statement. “This rapid escalation is largely due to three factors. First, energy prices rose sharply. Second, producers often raise their prices at the start of the year. And third, many purchasers rushed to buy inputs before potential tariffs could go into effect, and that surge in demand pushed prices higher.
“Of these three factors, tariffs are the only one that could continue to push input prices higher in the coming months,” said Basu. “Import taxes allow domestic producers to raise their prices, and the new 25% levies on steel and aluminum will result in just that if they remain in place. A strong majority of contractors expect their sales to increase over the next six months, according to ABC’s Construction Confidence Index, and the combination of increased demand for construction inputs and ongoing supply chain confusion suggests input price escalation could accelerate through the first half of 2025.”
