Material prices jump in July as tariffs drive up cost of aluminum, steel and copper

North Carolina Construction News staff writer

The producer price index (PPI) for materials and services used in nonresidential construction climbed 0.5 percent in July and 2.6 percent from a year earlier — the steepest 12-month increase since February 2023, according to an analysis by the Associated General Contractors of America (AGC) of federal data released today.

AGC officials warned that escalating tariffs are fueling the price hikes and urged the Trump administration to accelerate trade negotiations and reduce punitive tariffs on key construction inputs.

“Steep tariff increases earlier this year on aluminum and steel, along with a more recent tariff on raw copper, drove the producer price index for construction inputs higher for the third-straight month,” said Ken Simonson, AGC’s chief economist. “Even though contractors do not generally import materials directly, it is clear that domestic producers are raising prices in line with the protection tariffs are providing them.”

Tariffs on steel and aluminum were doubled to 50 percent on July 4, up from 25 percent imposed in March. A 50 percent tariff on raw copper took effect August 1. Broader tariffs on imports from most major trading partners also began earlier this month, adding pressure to construction costs.

Several key inputs led the year-over-year surge. Aluminum mill shapes jumped 7.4 percent in July and 13.7 percent compared to July 2024. Steel mill products dipped 0.5 percent for the month but still rose 8.8 percent over 12 months. Copper and brass mill shapes increased 5.7 percent in July and 6.9 percent year-over-year.

AGC officials cautioned that rising materials costs come as demand for some private-sector projects has slowed amid high interest rates and market uncertainty. They argued that finalizing trade deals would help stabilize construction markets and ease financial pressure on contractors.

“This administration has acted quickly to craft trade agreements with many trading partners, but several outstanding deals are leaving contractors saddled with higher materials prices as tariff levels remain high,” said AGC chief executive officer Jeffrey D. Shoaf. “Quickly finalizing remaining trade negotiations will help address higher materials prices and broader market uncertainty.”