The cost of construction materials and services inched upward in February, driven by high metal prices, and unrest in the Middle East is likely to drive prices still higher, according to a recent report. 

The producer price index for materials and services used in non-residential construction increased 0.1% compared to January and was up 3.1% compared to the same time a year ago, according to government data analyzed by the Associated General Contractors of America. AGC officials said that will make it more difficult for contractors and developers to move forward on projects. 

“Major increases in the prices for diesel fuel and key metals occurred before the start of the Iran war,” said Ken Simonson, the association’s chief economist, in a statement. “The disruption of oil, natural gas, and aluminum supplies from the Middle East is pushing up construction costs further and causing owners to delay projects.” 

Among the recent price jumps: 

• Aluminum mill shapes and steel mill products grew by 39.1% and 20.9%, respectively, from February 2025 to February 2026, the largest year-over-year increases since the supply-chain disruptions of early 2022. 
• Fabricated structural metal bar joists and rebar rose 20% year-over-year, while copper and brass mill shapes increased 15.1% compared to February 2025. 
• Diesel fuel prices jumped 20.3% from January, highlighting how quickly fuel costs can move, although prices were 3.1% higher than a year earlier. 

AGC officials said they are urging federal leaders to pursue policies that will calm the volatility in prices, noting that the recent rising costs for metals and fuel highlight how sensitive construction supply chains remain to global disruptions and trade policy.  

“There is a limit to how many price increases the market can absorb before owners put projects on hold,” said Jeffrey D. Shoaf, AGC’s CEO, in a statement. “Reducing uncertainty around tariffs and stabilizing supply chains would go a long way toward helping contractors keep projects moving forward.”