Washington, D.C. | April 2026 — Construction input prices rose sharply in March, driven largely by surging oil costs, according to data released by the Associated Builders and Contractors.
Key Price Trends
- Construction input prices increased 2.2% month over month
- Nonresidential input prices rose 2.3%
- Annualized increase reached 18% for Q1 2026
The spike reflects growing cost pressures across the construction sector, particularly in energy-linked materials.
Oil Driving Cost Inflation
According to Anirban Basu, Chief Economist at ABC, the surge in costs is closely tied to geopolitical tensions involving Iran, which have disrupted oil markets.
- Crude petroleum prices jumped 20.2% in March
- This increase placed upward pressure on nearly all construction materials
Higher fuel costs have also impacted logistics:
- Diesel prices surged 37.8% month over month
- This marks the largest increase since the 1990 Gulf War
Annual Material Cost Increase
On a year-over-year basis:
- Construction material prices rose 4.8%
- This is the highest annual increase since January 2023
Industry Sentiment
Despite rising costs, contractor sentiment remains cautiously optimistic. Profit margin expectations improved slightly in March, even as uncertainty persists.
Basu noted that continued volatility in oil markets could challenge this optimism, especially if elevated fuel prices persist.
Outlook
Fuel-driven inflation is currently the dominant cost pressure in construction. Future pricing trends will depend on geopolitical stability and energy market movements.
