Construction Association Officials Warn Rising Input Costs Are Outpacing Bid Prices, Increasing Pressure on Contractors and Project Budgets and Caution that a Gas Tax Holiday Will Do Little to Help
The producer price index for inputs to new nonresidential construction rose 1.7 percent in April and 6.6 percent from April 2025, according to an analysis by the Associated General Contractors of America of government data released today. In contrast, the producer price index for new nonresidential building construction, a measure of prices contractors say they would charge to build a fixed set of buildings, increased just 3.6 percent over the past year. Association officials noted that proposals to temporarily suspend the federal gas tax will do little to offset these price increases
“Construction input costs continue to rise much faster than contractors’ bid prices, particularly for energy-intensive and metals-related materials,” said Macrina Wilkins, director of market insights for the Associated General Contractors of America. “That gap is making it increasingly difficult for contractors to accurately price projects and raising the risk of delays, redesigns, and deferred construction activity if cost volatility persists.
Energy-related inputs posted the steepest increases in April. Diesel fuel prices climbed 13.6 percent in April alone and were 73.8 percent higher than a year earlier. Meanwhile, asphalt prices rose 18.0 percent year-over-year following a sharp 41.0 percent monthly increase in April.
Metals prices also continued to increase sharply. Aluminum mill shapes prices were up 37.3 percent from April 2025, while copper and brass mill shapes increased 20.9 percent over the year. Steel mill products prices climbed 13.3 percent year over year, while fabricated structural metal bar joists and rebar increased 13.6 percent over the same period.
Transportation costs also accelerated. The producer price index for truck transportation of freight increased 8.1 percent in April and 15.2 percent compared to a year ago, reflecting the impact of rising fuel costs and ongoing supply chain pressures. Construction machinery and equipment prices increased 4.0 percent year over year.
Association officials noted that rapidly rising diesel and fuel-related costs are increasing pressure throughout the construction supply chain. They noted, however, that proposals like a federal gas tax holiday are unlikely to provide much relief. They added that suspending the federal gas tax would undermine a critical source of long-term infrastructure investment without providing meaningful or guaranteed relief for contractors or consumers.
“A gas tax holiday may sound appealing politically, but it will not meaningfully reduce diesel or transportation costs for contractors and is unlikely to deliver significant savings to consumers,” said Jeffrey D. Shoaf, chief executive officer of the Associated General Contractors of America. “At the same time, suspending the gas tax would weaken the user-funded infrastructure program that supports the roads, bridges, and transportation systems the economy depends on.”