Construction Material Price Update: What Contractors Should Watch This Quarter

Every contractor has experienced it.

You submit a competitive bid, receive the award, and by the time materials are ordered, supplier pricing has changed. Suddenly, what looked like a healthy profit margin begins to disappear.

While construction material pricing has become less volatile than it was during the height of the pandemic, today’s market remains anything but predictable. Fuel prices, tariffs, supply chain disruptions, labor shortages, and global demand continue to influence the cost of building materials.

The lesson for contractors is simple: today’s estimate should be built on today’s prices—not last month’s.

Recent Price Trends Show Mixed Signals

Recent data from the Associated Builders and Contractors (ABC), based on the U.S. Bureau of Labor Statistics’ Producer Price Index (PPI), shows construction input prices declined during June, largely because of lower petroleum costs. Overall construction input prices fell 1.1% from the previous month after significant increases earlier this year.

While that’s encouraging news, it doesn’t necessarily mean contractors should expect lower project costs moving forward.

ABC Chief Economist Anirban Basu noted that although declining oil prices helped reduce overall construction input costs in June, ongoing inflationary pressures and market uncertainty could continue pushing material prices higher over the coming months.

In other words, one month’s decline doesn’t signal the end of price volatility.

Energy Still Drives Construction Costs

Many contractors focus on the price of lumber, steel, or concrete—but fuel often has the biggest impact across an entire project.

Diesel powers excavation equipment, delivery trucks, cranes, generators, paving equipment, and countless other pieces of machinery used every day on a jobsite.

When fuel prices rise, contractors often experience higher costs in several ways:

• Equipment operation
• Material transportation
• Supplier delivery charges
• Asphalt production
• Excavation and earthmoving
• Freight costs
• Waste hauling

Recent declines in crude oil prices helped reduce construction input costs during June, but energy markets remain highly sensitive to global events and geopolitical uncertainty.

Steel, Concrete and Other Key Materials

Although some materials have stabilized compared to previous years, pricing remains inconsistent across product categories.

Contractors should continue monitoring:

• Structural steel
• Reinforcing steel
• Concrete products
• Cement
• Asphalt
• Copper
• Electrical components
• PVC piping
• Utility materials

Large infrastructure projects, manufacturing expansion, energy development, and AI data center construction continue to generate significant demand for many of these products, creating localized shortages even when national pricing appears stable.

That means contractors may experience very different pricing depending on project location, supplier availability, and delivery schedules.

Don’t Assume Supplier Quotes Will Hold

One of the most common estimating mistakes is relying on pricing from previous bids.

Material quotes can change quickly, particularly on projects with long lead times.

Whenever possible:

• Request updated supplier pricing before submitting bids.
• Verify lead times for critical materials.
• Confirm delivery schedules.
• Review any expiration dates on supplier quotes.
• Consider escalation clauses on larger or longer-duration projects.

These small steps can prevent costly surprises after a contract has been awarded.

Build Contingencies Into Your Estimates

No estimate can predict every future price movement.

However, experienced estimators recognize uncertainty and account for it during preconstruction.

Depending on project size and duration, contractors may choose to:

• Include reasonable contingency allowances.
• Lock in pricing with suppliers when possible.
• Phase material purchases strategically.
• Review supplier alternatives.
• Update estimates immediately before bid submission.

The goal isn’t to overestimate costs.

The goal is to avoid underestimating them.

Why Accurate Estimating Matters More Than Ever

Construction estimating has never been just about calculating quantities.

Today’s estimates must also account for changing market conditions.

Accurate material takeoffs, current supplier pricing, subcontractor coordination, and careful project planning help contractors submit competitive bids while protecting profitability.

When estimates rely on outdated pricing—or when important cost variables are overlooked—the risk doesn’t disappear.

It simply shifts to the contractor.

Looking Ahead

Although recent Producer Price Index data suggests construction input costs eased during June, most economists continue to caution that material prices are likely to remain volatile throughout the year due to ongoing inflation pressures, energy markets, trade policy, and continued demand across several construction sectors.

For contractors, the best strategy isn’t trying to predict the market perfectly.

It’s building estimates that reflect current conditions, updating pricing frequently, and planning for uncertainty before construction begins.

That’s exactly where professional preconstruction services provide value.

At Division Services, LLC, we help contractors make informed decisions through detailed construction estimating, material takeoffs, subcontractor coordination, and preconstruction planning. By combining current market awareness with decades of construction experience, we help clients submit competitive bids while protecting their bottom line.