The producer price index for inputs to new nonresidential construction rose 7.1% from July 2025 to July 2026 as numerous input prices accelerated to multi-year highs, according to an analysis by the Associated General Contractors of America of government data. Association officials called for reduced and stable tariffs for construction inputs, along with prompt enactment of a highway and transit funding bill.
“Construction firms are being hit with outsized cost increases for a host of materials and also labor,” says Ken Simonson, the association’s chief economist. “Unless there is relief from tariffs or additional funding for highway and transit projects, both private and public construction work face cutbacks."
The largest price increases affected petroleum products and metals that are subject to tariffs of up to 50%. The producer price index for diesel fuel, which reflects prices at the refinery or fuel terminal level, jumped 44.2% from July 2025 to last month despite declining for two months in a row. The index for liquid asphalt soared 45.2% year-over-year, following a 1.2% monthly gain in July.