A national construction trade group is sounding the alarm after finding that the cost of construction materials for non-residential construction projects in May grew at the fastest rate in years. 

The producer price index for goods such as steel and aluminum as well as diesel for shipping materials to worksites rose 1.8% in May and is up 8.4% from May 2025, according to an analysis by the Associated General Contractors of America of recent government data, according to a release.  

Such cost increases haven’t been since 2021 and are outpacing the prices contractors are able to bid for projects. 

“Runaway prices for key construction inputs are pushing up costs twice as fast as the 4.2 percent rise in the consumer price index,” said Ken Simonson, AGC’s chief economist, in a statement. “Contractors are being hit by a double whammy of rising materials prices and much lower increases in what they can charge for new projects.” 

The cost of fuel saw the most stark increase over the past year, with diesel fuel up 105.9% since May 2025 and nearly 20% from April alone. Freight transportation costs are up 3.4% in the past month and 17.3% over the past year. 

Prices for aluminum mill shapes grew 48.8% from May 2025 and 4.2% in the most recent month, while copper and brass mill shapes increased 26.8% over the year and 4.3% for the month. Structural steel – fabricated bar joists and rebar – rose 15.6% over 12 months, including a 1% rise from April to May. 

AGC officials attribute the steep increases to the ongoing U.S. military activity against Iran and questions about possible new tariffs, all at a time when much construction outside of data centers is softening.