Steel prices rise 4% for US construction companies, as tariffs start to bite

That is according to analysis by Associated Builders and Contractors of the US Bureau of Labor Statistics’ Producer Price Index.

Overall construction input prices rose 0.3% compared to the same month a year ago, while non-residential construction input prices were 0.1% lower.

Nonetheless, iron and steel rise by 3.9% month on month in February, although prices were still -13% year on year.

Steel mill products were up 2.7% month on month but were -18.9% year on year.

Softwood lumber increased 2.8% month on month and rose 10.9% year on year.

ABC chief economist Anirban Basu said, “Non-residential input prices increased at a rapid pace in February and have risen at a far-too-hot 9.0% annualized rate through the first two months of 2025.

“Iron and steel prices rose at a particularly fast rate in February, a result of tariffs providing domestic producers with increased pricing power.

“Despite the sizable increase over the past two months, non-residential input prices are still down on a year-over-year basis. That will likely change in the coming months as tariffs continue to put upward pressure on prices.”

Nonetheless, ABC members were still optimistic about their profit margins, according to ABC’s Construction Confidence Index. When asked about their profit margin expectations, 39.3% of members said they expected an increase over the next six months. However, the share expecting a decrease rose to 23%, which is the highest share since October 2024.

Source: Associated Builders and Contractors