Construction input prices held steady in December, with total construction and nonresidential input prices both declining by 0.2%, according to an analysis by the Associated Builders and Contractors (ABC). Lower energy costs, including a $0.45 per gallon drop in diesel prices since December 2023, were a significant factor in stabilizing prices, said Anirban Basu, ABC's chief economist.

However, rising prices for copper and oil at the end of 2024 are raising red flags. “Prices for other inputs, like copper wire and cable or sand and gravel products, have escalated significantly over the past year,” Basu said.

Concerns are mounting about potential material price hikes in 2025, particularly if President-elect Donald Trump moves forward with steep tariffs, according to Ken Simonson, chief economist at the Associated General Contractors of America (AGC).

The ABC report highlights the tension between short-term price stability and long-term uncertainty. While 2024 saw only modest year-over-year increases in input prices — 0.9% overall and 0.6% for nonresidential inputs — material-specific pressures could signal a shift.

“Costs are likely to rise much faster in 2025,” Simonson told Construction Dive. “Many other construction materials are likely to experience sudden price increases if President-elect Trump follows through on his threats to impose steep tariffs.”

These fears align with AGC’s Jan. 8 construction outlook survey, where most contractors listed rising material costs and tariffs as top challenges for the coming year.

Despite this, contractor sentiment remains positive. “The fact that overall input prices have remained flat in recent quarters is purely good news,” Basu said. Additionally, according to ABC’s Construction Confidence Index, only 20% of contractors expect profit margins to decline over the next six months.

The construction industry continues to balance short-term gains with long-term risks, as 2025 brings potential volatility in material costs.