Construction Material Costs in 2026: What the Data Says About Tariffs, Metals and Your Next Bid
By Virginia Viadas
If you're pricing a project in 2026, one number frames everything: construction input prices have increased more than 43 percent since early 2020, according to the U.S. Bureau of Labor Statistics — and those increases have not reversed. The 2026 story is not about relief; it's about learning to budget for permanent volatility.
The headline numbers
| Indicator | Figure | Source |
|---|---|---|
| Input price increase since early 2020 | +43% | U.S. Bureau of Labor Statistics |
| Fabricated structural metal products since 2020 | +63% | BLS / ENR |
| Building material prices, year over year | +3.5% (largest since early 2023) | NAHB / BLS |
| Nonresidential input prices, early 2026 | 12.6% annualized surge (Jan–Feb) | Associated Builders and Contractors |
| Nonresidential costs, Q1 2026 | +1.7% quarterly, +6.8% year over year | Mortenson Cost Index |
| Expected 2026 baseline escalation | 4% to 6% | Industry consensus |
| Total US construction spending (May 2026) | $2.21 trillion annual rate | U.S. Census Bureau |
The pace accelerated sharply at the start of the year: nonresidential construction input prices surged at a 12.6 percent annualized rate during the first two months of 2026, the fastest pace since the supply chain disruptions of early 2022, per Associated Builders and Contractors data.
Tariffs: the structural driver
Construction remains one of the most tariff-exposed industries in the country. As of April 2026, steel, aluminum, and copper items made entirely or mostly from those metals carry a 50 percent tariff, with derivatives at 25 percent; industrial and electrical equipment such as transformers, panel boards, and conduit systems faces 15 percent; softwood lumber carries 10 percent with derivative products at 25 percent; and a global 10 percent baseline tariff runs through July 2026.
The long-term math is sobering: tariff impacts are expected to range from 5 to 25 percent depending on material type, with aggregate construction costs estimated to rise roughly 8 percent under current policy conditions.
Not every material is rising
The picture is uneven — and that unevenness is exploitable for smart procurement. Metal molding and trim prices surged nearly 50 percent year over year, while softwood lumber remains well below last year's levels and ready-mix concrete prices have softened, likely reflecting stagnant construction spending, according to NAHB analysis of BLS data.
The quarterly detail confirms metals as the pressure point: Q1 2026 increases were driven by metal stair fabrication (+4.5%), steel framing and stair erection (+4.1%), structural steel and metal decking (+3.8%), fire protection systems (+2.8%) and plumbing (+2.7%).
The copper wildcard: data centers
A new demand competitor has entered the market. A single 1-gigawatt AI data center now consumes up to 50,000 metric tons of copper — three to four times more than a conventional facility — competing directly with residential electrical contractors for the same wire, panels and gear, with switchgear lead times in some markets stretching to two to four years.
Kenneth D. Simonson, chief economist at the Associated General Contractors of America, notes that with slow growth for most structure types there will be little demand pressure on materials overall, but imported materials and those competing with imports will see outsized cost increases.
What contractors are doing about it
Deloitte's 2026 industry outlook reports that many mid-market builders are incorporating tariff-adjustment or escalation clauses to pass cost increases to project owners; where such clauses are absent, contractors under fixed-price agreements bear the full impact, often resulting in delays or redesigns. Other defensive strategies include earlier procurement, indexed pricing tied to published benchmarks, and increased US sourcing.
FAQ
How much will construction costs rise in 2026?
Baseline escalation is expected between 4 and 6 percent, with higher increases in tariff-sensitive or labor-intensive trades.
What tariffs affect construction materials in 2026?
Steel, aluminum and copper products carry 50% tariffs; their derivatives 25%; electrical equipment 15%; softwood lumber 10%; plus a 10% global baseline through July 2026.
Which materials are getting cheaper?
Softwood lumber and ready-mix concrete have seen price relief, while metal products continue posting sharp increases.
Why are copper and electrical equipment so expensive?
Data center construction is absorbing massive volumes — a single 1-GW AI facility uses up to 50,000 metric tons of copper — pushing switchgear lead times to 2–4 years in some markets.