According to a new analysis by the AGC, the producer price index for nonresidential construction materials rose by 3.3% in 2025, with aluminum prices increasing by 30.5%, steel by 17%, and copper by 11.8%. These are the steepest increases since 2022.
The AGC highlights that high tariffs, such as the 50% tariff on imported metals, have enabled domestic producers to raise prices, significantly driving up costs for construction materials and equipment.
Price volatility makes it difficult for contractors to estimate project costs and submit accurate bids. The AGC is urging federal leaders to resolve trade disputes to stabilize tariffs and provide pricing certainty.
Construction firms faced a challenging pricing environment throughout 2025, as the cost of materials and services for nonresidential construction climbed 3.3 percent. A new analysis of government data by the Associated General Contractors of America (AGC) reveals that steep, double-digit increases in the prices of aluminum, steel, and copper were the primary drivers behind this surge.
According to the AGC report, these significant price hikes are creating considerable uncertainty for contractors, making it challenging to submit accurate, competitive bids for future projects.
The association points to high tariff rates on key imported materials as a significant factor enabling domestic producers to implement substantial price increases.
The AGC data highlights several year-over-year price shifts from December 2024 to December 2025:
Aluminum mill shapes soared by 30.5 percent.
Steel mill products jumped by 17 percent.
Copper and brass mill shapes climbed by 11.8 percent.
[Read more The Economics of Steel in Construction: Materials Management to Keep from Getting Bent Out of Shape, by Devin Bell, ConstructConnect Associate Economist]
Ken Simonson, the AGC’s chief economist and featured speaker on ConstructConnect’s Construction Economy Outlook webcast, noted the connection between these increases and trade policy.
“Even though these indexes are based on selling prices of domestic producers, it is clear that the steep tariffs on imported metals and products are enabling U.S. sellers to push up costs for construction materials and equipment,” Simonson stated.
Simonson added that the cost of construction equipment and machinery also rose by 5.6 percent over the same period, indicating a broader impact.
This price volatility presents a significant operational hurdle. “It is hard for contractors to make reliable estimates on how much to charge for new construction projects when they don’t know how much prices will increase for key materials,” explained Jeffrey D. Shoaf, the chief executive officer of the AGC.
In response to these findings, the AGC is urging federal leaders to prioritize resolving ongoing trade disputes. The association argues that establishing stable trade agreements would likely lead to lower tariff levels, providing the price stability and predictability that contractors need to operate effectively and confidently plan for upcoming work.
Without such measures, the industry may continue to face escalating costs and bidding uncertainty in 2026.
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