Prices of construction machinery and equipment dipped 0.2% in February compared to the previous month, and were up 0.2% over February 2024, according to Associated Builders and Contractors.
The overall prices of materials and services used in nonresidential construction rose 0.5% in February and followed an increase of 0.7% in January, according to the Associated General Contractors of America. Association officials noted that materials prices began increasing even before most of the threatened new tariffs were put in place.
“It’s a bad sign that construction costs have been rising significantly even before most of the Trump administration’s tariffs have taken effect,” said Ken Simonson, AGC chief economist in a statement. “Now that many tariffs that hit construction materials are in effect, with more measures pending, construction costs are likely to rise much more.”
Said Anirban Basu, chief economist for ABC, in a statement:
“Nonresidential input prices increased at a rapid pace in February and have risen at a far-too-hot 9.0% annualized rate through the first two months of 2025. Iron and steel prices rose at a particularly fast rate in February, a result of tariffs providing domestic producers with increased pricing power.
“Despite the sizable increase over the past two months, nonresidential input prices are still down on a year-over-year basis,” said Basu. “That will likely change in the coming months as tariffs continue to put upward pressure on prices. While ABC members are, on balance, still optimistic about their profit margins, according to ABC’s Construction Confidence Index, 23% of them expect their profitability to decline over the next six months, the highest share since October 2024.”
