Construction Material Prices Rise on Energy Costs

ABC Reports 2.2% March Price Rise as Energy Costs Trigger Construction Materials Industry Update

WASHINGTON, United States — May 4, 2026 — The U.S. construction materials sector is facing renewed pricing pressure after Associated Builders and Contractors (ABC) reported that construction input prices increased 2.2% in March compared with the previous month, as higher crude petroleum costs pushed overall contractor expenses upward.

According to ABC’s latest analysis of U.S. Bureau of Labor Statistics data, nonresidential construction input prices rose 2.3% during March, highlighting a broader rise in project-related procurement costs across commercial building activity.

On an annual basis, overall construction input prices are now 4.8% higher than a year ago, while nonresidential construction input prices have climbed 5.4%, indicating that material inflation remains an active budget concern for contractors despite earlier signs of stabilization.

Energy Costs Drive the Latest Upswing

ABC attributed much of the monthly increase to movements in the energy complex.

While natural gas and unprocessed energy materials declined during March, crude petroleum prices surged by more than 20%, making oil the primary inflationary trigger behind higher construction input costs.

ABC Chief Economist Anirban Basu noted that rising oil prices—partly linked to geopolitical tensions—were a major contributor to the monthly increase. He further warned that higher diesel prices are likely to increase shipping and transportation expenses, creating additional cost pressure across multiple construction material categories.

Key March construction pricing indicators include:

• Construction input prices: +2.2% month over month 

• Nonresidential construction input prices: +2.3% month over month 

• Annual construction input inflation: +4.8% 

• Annual nonresidential input inflation: +5.4% 

• Crude petroleum prices: up more than 20% in March 

Contractors Face Renewed Budget Pressure

The March increase adds another layer of caution for contractors managing procurement and bid planning in an already volatile operating environment.

Although it was noted that contractors have remained relatively optimistic regarding profit margins in recent months, continued instability in global energy markets may begin to affect transportation, supplier delivery charges, and broader material budgeting if oil prices remain elevated.

According to NMSC analysts, the latest ABC data suggests that the Construction Materials market is not yet in a full normalization phase, as petroleum-linked logistics costs continue to influence total delivered material expenses more than many contractors had anticipated at the start of 2026.

“Energy remains one of the fastest transmission channels for construction inflation because it impacts both direct materials and downstream freight movement,” notes Senior Research Analyst at Next Move Strategy Consulting. “The March increase reinforces that contractors must continue building flexibility into procurement budgets.”

Construction Materials Market Remains Sensitive to Oil Volatility

The latest release shows that even when some energy categories soften, crude petroleum and diesel movements can still materially alter total construction input pricing.

For builders and procurement managers, this means transportation-sensitive materials and delivered goods may remain exposed to cost fluctuations through the coming quarter.

As a result, the Construction Materials Market continues to operate under an energy-driven pricing environment where contractor margin protection will depend heavily on fuel stability and supply chain efficiency.

Source: Associated Builders and Contractors (ABC)

Prepared By: Joydeep Dey