Tariffs drive surge in March construction materials prices, ABC says

Construction input prices increased 0.5 percent in March, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released April 11. Nonresidential construction input prices increased 0.6 percent for the month. 

Both overall and nonresidential construction input prices increased 0.6 percent for the month. 

“Construction input prices increased at a rapid pace for the third consecutive month in March and have now risen at a 9.7 percent annualized rate through the first quarter of 2025,” says ABC Chief Economist Anirban Basu. “The emerging effects of tariffs are glaring in the March data release, with iron and steel, steel mill products and copper wire and cable prices all rising more than 5 percent for the month. 

“While contractors remain busy for the time being, according to ABC’s Construction Backlog Indicator, this pace of input price escalation, coupled with rising uncertainty, will cause projects to be delayed and canceled if it persists for any meaningful length of time.” 

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An April 1 statement from the Organization for Economic Cooperation and Development (OECD) says Chinese steel exports have more than doubled since 2020, surging to 118 million metric tons in 2024. China, which contains about 17 percent of the world’s population, has been producing more than half the world's annual steel total each year since 2015.

“Steel prices and industry profitability continued to decline during 2024, hitting historically low and unsustainable levels in some regions,” says OECD Steel Committee Chair Ulf Zumkley. “These negative developments have disrupted international markets, resulting in trade actions across a growing number of countries that are likely to persist in the light of increasing excess capacity and sluggish market growth.”

The committee concludes that without policy adjustments in countries that engage in such practices, global excess capacity is expected to rise from an estimated 602 million metric tons in 2024 to 721 million metric tons by 2027, “putting enormous pressures on the viability of even highly competitive steelmakers.”