Construction Input Prices Are Up 11.2% in a Year. Here Is What the Number Covers

On October 15, 2026, Associated Builders and Contractors (ABC) reported that construction input prices rose 11.2% between September 2025 and September 2026. ABC based the figure on its analysis of the U.S. Bureau of Labor Statistics (BLS) Producer Price Index for September. Its chief economist called it the largest year-over-year increase in nearly four years.

This article covers what the 11.2% measures, what drove it, and what it does not tell a contractor about the price of any one job. It also covers one place where a bid and a license meet, using Tennessee as the example. For how Tennessee licenses contractors, start with the Tennessee contractor license page.

At a glance

• Who: Associated Builders and Contractors, in an analysis of BLS Producer Price Index data released October 15, 2026.
• The number: construction input prices rose 11.2% from September 2025 to September 2026, and 2.2% from August to September. Nonresidential construction input prices rose 11.2% over the year and 2.3% in the month.
• The measure: a BLS index of producer prices for goods used in construction, not seasonally adjusted. Fuel is counted. Labor is not.
• Fuel: crude petroleum prices rose 28.3% in September. The energy part of the index is up 69.9% over the year. The part called goods less foods and energy is up 5.8%.
• Caution: the August and September figures are preliminary and can be revised.
• Licensing: the ABC report says nothing about licensing.

What ABC reported

ABC's release says construction input prices increased 2.2% in September compared with the previous month, and that nonresidential construction input prices increased 2.3% for the month. It adds: "Both overall and nonresidential construction input prices rose 11.2% between September 2025 and September 2026."

Anirban Basu, ABC's chief economist, said: "Construction input prices have risen more than 11% over the past 12 months, the largest year-over-year increase in nearly four years. While higher fuel prices brought about by the conflict in Iran have driven a substantial portion of the increase, prices for tariffed materials like iron, copper and other metal products continue to rise rapidly."

What the 11.2% measures

It compares two single months, September 2025 and September 2026. It is not an average of the year and it is not a change since January.

BLS says the Producer Price Index "measures the average change over time in selling prices received by domestic producers of goods and services." So this number tracks what producers receive for the goods that go into construction. It is not what a contractor pays at the supply counter, it is not a bid price, and it is a goods index, so labor is not in it.

ABC's release does not list the series ID. Its figures match the BLS index called "Inputs to construction industries, goods" (series WPUIP2300001). From the BLS data, that index was 328.499 in September 2025 and 365.374 in September 2026, which is 11.2% higher. The nonresidential figures match "Net Inputs to Nonresidential Construction, Goods" (series WPUIP2312001). Both are not seasonally adjusted.

ABC's headline says "materials prices," but the text of its release says "construction input prices," and the index counts energy. That is why this article says input prices.

Fuel and metals, and when the rise came

ABC's release says crude petroleum and unprocessed energy materials prices increased 28.3% and 22.2%, respectively. The BLS crude petroleum index confirms the 28.3% for September, up from August.

Inside the BLS data, the energy part of the construction input index rose 69.9% from September 2025 to September 2026. The part called goods less foods and energy rose 5.8%. A few individual BLS product indexes for the same twelve months:

• Steel mill products: up 27.6%.
• Copper and brass mill shapes: up 30.0%.
• Aluminum mill shapes: up 25.2%.
• #2 diesel fuel: up 115.2%.
• Lumber and plywood: up 9.6%.
• Concrete products: up 4.2%. Ready-mixed concrete: up 2.3%.

The rise was not a steady climb over twelve months. The input index was flat from September through December 2025. From January to September 2026 it rose 10.8%.

The August and September 2026 figures are preliminary. BLS says indexes can be revised for up to four months after they are first published.

What the number does not tell you

It does not tell you what any contractor bid. A separate BLS index, for new nonresidential building construction, rose 5.4% over the same twelve months. That index covers a different thing, so the two numbers are not subtracted from each other, and neither one says what a contractor bid.

ABC also reported what contractors expect. More than 1 in 4 ABC contractors expect their profit margins to contract over the next six months, according to ABC's Construction Confidence Index. That is a survey of expectations, not a count of what has happened.

Nobody in the report predicts where prices go next, and this article does not either. BLS has scheduled the next Producer Price Index report, with October's numbers, for November 13, 2026.

Where costs and licenses meet

Neither ABC nor BLS says anything about licensing, and this article does not claim the two are linked. But a contractor who bids work is holding dollar numbers, and a Tennessee license has dollar numbers of its own.

Tennessee is one example. The Tennessee Board for Licensing Contractors says: "A contractor's license is required before contracting, including bidding, offering to engage, or negotiating a price," for "projects of $25,000 or more when acting as a prime contractor, certain subcontractor, or construction manager/consultant." The Board also says: "The monetary limit is the total dollar amount for each individual project or contract." It adds: "Monetary limits are calculated as 10 times the lesser of working capital or net worth, plus required experience."

So when the cost of a job changes its price, that price is the number to hold up against both lines. If you bid in Tennessee, check what your license covers before you submit. Other states have their own rules.

For companies that want to bid more work

In Tennessee, the company's qualifying agent, an owner, officer or employee, must pass the required exams to qualify the company. An owner with the experience can qualify the company personally. A company whose owner does not yet have the experience or the exams can be qualified by a licensed qualifying agent who is a real employee of the company. Contractor qualifier services explains how The Licensing Company helps with that. For Tennessee's classifications, monetary limits and exam rules, see the Tennessee contractor license page.

Frequently asked questions

What does the 11.2% increase in construction input prices measure? It is the change in a BLS Producer Price Index for goods used in construction between September 2025 and September 2026, as analyzed by ABC. It includes energy and excludes labor.

Is 11.2% what contractors are paying for materials? No. The index tracks prices received by domestic producers. What one contractor pays at a supplier can be different, and the index is not a bid price.

Did construction input prices rise steadily over the year? No. The index was flat from September through December 2025, then rose 10.8% from January to September 2026. Fuel was a large part of that rise.

Does the ABC report say anything about contractor licensing? No. It covers prices only. The licensing section above is general education about one state's rules.

When is the next report? BLS has scheduled the October Producer Price Index for November 13, 2026. The figures in this article are for September and can change.

This article is general education, not legal advice, a price forecast or pricing advice. The Tennessee Board for Licensing Contractors or a Tennessee construction attorney can confirm how the law applies to a specific job.

Marshall Schofield, one of the nation's leading contractor exam prep instructors, has helped thousands upon thousands of contractors get licensed. Jeremiah Jaskulski is a licensed contractor who has lived the licensing process across multiple states. Together they founded The Licensing Company, and they help contractors get licensed the right way in Tennessee and nationwide. Sources: ABC news release, October 15, 2026, BLS Producer Price Index news release, October 15, 2026, BLS series WPUIP2300001, BLS Producer Price Index overview, AGC producer price tables, updated October 15, 2026, and the Tennessee Board for Licensing Contractors.