While it comes as a surprise to no one, the costs of construction materials are up year over year since August 2025 with iron, steel, softwood lumber, copper wire, and several derivative metal products seeing year-over-year increases of 10 percent or more, which is sure to be a hit to profitability moving forward.
According to the latest data from the U.S. Bureau of Labor Statistics, as analyzed by the Associated Builders and Contractors, overall, construction input prices were up 1.2 percent month over month in August, sitting 8.9 percent higher than the previous year. Steel mills, especially, saw prices increase 23.4 percent since August 2025, while iron and steel were up 17.9 percent over the same period. Crude petroleum increased 34.9 percent, while switchgear and copper wire, which are critical for data centre construction, were up 12.3 percent and 27.2 percent, respectively.
Between elevated oil prices and the ongoing trade war between Canada and the U.S. persisting, there are many geopolitical factors driving prices higher, which is causing developers to reconsider projects.
The Associated General Contractors of America (AGC) September survey shows that around 55 percent of contractors reported abandonments or delays in the past six months, with one-third of respondents citing increasing costs as the reason.
“Construction firms are being squeezed by tariff- and war-induced materials cost increases, even as they boost wages to attract personnel,” said Ken Simonson, AGC Chief Economist, in a release. “Those cost increases, according to our latest survey, are a major reason project owners are cancelling, postponing or scaling back projects.”
