Cost increases for construction materials, particularly steel and aluminum, are contributing to more commercial, industrial and civic building projects being scaled back, delayed or canceled, according to one builder advocacy group. 

The producer price index for materials and services used in nonresidential construction rose 0.2% in August and 2.5% from a year ago, according to an analysis of recent government data conducted by the Associated General Contractors of America.  

Three major construction materials contributed drove the increase in costs. Aluminum mill shapes jumped 5.5% last month and 22.8% from August 2024 while steel mill products rose 1.5% in August and 13.1% over 12 months. Lumber and plywood increased 0.5% for the month and 4.8% year-over-year. 

Those increases align with tariffs on steel and aluminum being raised by 50% on June 4, following an earlier increase to 25% in March. A 50% tariff on copper products and components took effect on August 1. In addition, broad tariffs covering most imports from nearly all major suppliers of construction materials were activated in early August, making additional cost increases likely. 

“The huge increases in steel and aluminum tariffs appears to have enabled domestic producers to push up their selling prices,” said Ken Simonson, the association’s chief economist, in a statement.  

He added that a recent survey conducted by AGC found that 43% of contractors reported at least one project in the past six months had been canceled, postponed or scaled back because of higher costs.  

“These price increases are prompting some owners to rethink planned construction projects,” Simonson said.