The materials market in May 2026 is not forgiving. Steel has reversed two quarters of decline and is trending upward again. Copper just shattered an all-time price record. Lumber has posted nine consecutive quarters of year-over-year growth. And concrete, while not spiking, is sitting at a persistently elevated level with no near-term relief in sight. If those four numbers are not already part of every project conversation your firm is having, they should be.
The producer price index for construction inputs rose 1.7 percent in April 2026 alone and 6.6 percent year-over-year, according to the Associated General Contractors of America’s May 13, 2026, analysis of Bureau of Labor Statistics data.
That headline figure understates the pace of what happened earlier in the year — construction input prices surged at a 12.6 percent annualized rate in the first two months of 2026, a rate that Anirban Basu, chief economist for Associated Builders and Contractors, described as “staggering,” according to Construction Dive’s March 2026 analysis.
This article breaks down exactly where each material stands today, why prices are moving the way they are, what the key risk exposures look like by project type, and what the data suggests for the months ahead.
Key Takeaways
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Construction input prices rose 6.6% year-over-year through April 2026, with a 1.7% surge in April alone (AGC, May 2026).
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Copper hit an all-time record of $6.61/pound on May 13, 2026 — up 43.6% year-over-year — creating acute risk for any project with significant electrical scope.
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Structural steel reached $2,519.61/ton, up 7.5% from Q1 2026, with Gordian forecasting another large increase in Q3.
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Lumber has posted nine straight quarters of year-over-year growth, with framing lumber at $916.62/MBF entering Q2 2026.
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The gap between input cost escalation and bid price increases is real and widening — contractors without escalation provisions in their agreements are absorbing risk that belongs in the contract.
The Macro Picture: Input Costs Are Running Ahead of Bid Prices
Before getting into individual commodities, the broader context is essential.
Construction input prices surged at a 12.6 percent annualized rate during the first two months of 2026, according to an Associated Builders and Contractors analysis of BLS Producer Price Index data. That is not a mild uptick — it is a rate of escalation that compresses margins on any project still priced to year-ago assumptions.
More concerning than the raw number is what it means at the bid table. Macrina Wilkins, director of market insights for the Associated General Contractors of America, stated in the AGC’s May 13, 2026, release: “Construction input costs continue to rise much faster than contractors’ bid prices, particularly for energy-intensive and metals-related materials.”
Wilkins continued: “That gap is making it increasingly difficult for contractors to accurately price projects and raising the risk of delays, redesigns, and deferred construction activity if cost volatility persists.”
That gap — between what it costs to build and what owners will accept in a bid — is the defining financial risk facing commercial contractors in May 2026.
Four materials sit at the core of that gap.
Steel: A Sharp Reversal After Two Quarters of Decline
Structural steel enters May 2026 at approximately $2,519.61 per ton, according to Gordian’s April 2026 steel price update. That is a 7.5 percent increase from Q1 2026, reversing two consecutive quarters of price declines that had pushed the material to approximately $2,343.93 per ton in January 2026.
The reversal is not surprising to anyone tracking inputs. Energy and fuel cost spikes carry an outsized effect on hot-rolled metal products because steel production is inherently energy-intensive.
Diesel fuel prices are up 73.8 percent year-over-year from April 2025, per the AGC’s May 2026 analysis — and that cost is embedded in every ton of steel produced and transported. Gordian is forecasting another large quarter-over-quarter cost increase for steel in Q3 2026.
The Producer Price Index confirms the trend. Steel mill products are up 13.3 percent year-over-year from April 2025, and fabricated structural metal bar joists and rebar have increased 13.6 percent over the same period, according to AGC data.
On the tariff front, Section 232 duties on steel and aluminum now reach 50 percent on items made entirely or substantially of those metals, with a 25 percent levy on products “substantially made” of steel and a 15 percent duty on derivatives with lower metal content, per the AGC Tariff Resource Center.
Barry Zekelman, executive chairman and CEO of Zekelman Industries, offered some perspective in an April 2026 Construction Dive report: “The steel frame of a building is about 8 to 9 percent of the total cost of a typical commercial building. The materials in the steel frame are about 33 percent of that cost. So, the total impact to a building will not be significant even if prices move up.”
That perspective may steady nerves on certain project types. On data center builds, mission-critical facilities, and large-scale industrial work — where structural steel density is high — the calculus is more unforgiving. Contractors with concentrated steel exposure and extended procurement windows face real margin risk as Q3 approaches.
Copper: An All-Time Record That Changes Electrical Budgeting
No commodity in May 2026 is moving more dramatically than copper. On May 13, 2026, copper futures reached an all-time record high of $6.61 per pound, according to Trading Economics data cited by ConstructConnect. Earlier in the same week, COMEX copper was trading near $5.76 per pound. The metal has surged 43.6 percent from a year earlier and climbed 8.88 percent in the past month alone.
The Producer Price Index confirms what futures markets are already showing. ConstructConnect Associate Economist Devin Bell found that the PPI for copper and copper products rose from 585.3 in April 2025 to 729.8 in April 2026 — a nearly 25 percent increase in twelve months and the highest reading on record. The AGC’s broader tracking shows copper and brass mill shapes up 20.9 percent year-over-year from April 2025 to April 2026.
The drivers behind this run are structural, not merely speculative. ConstructConnect’s May 2026 analysis attributed the rally to stronger Chinese industrial demand, continued consumption across power grids and renewable energy infrastructure, and accelerating expectations for data center investment.
The U.S.-Iran conflict, which escalated in late February 2026, has added a second layer of supply-side pressure. Sulphuric acid availability — a critical input to copper refining — faces disruption risk that could further tighten global supply conditions, according to ConstructConnect’s reporting.
For commercial contractors, the exposure goes well beyond raw wire pricing. Conduit systems, transformers, switchgear, busway, controls, and utility interconnections all carry copper cost.
Projects with large electrical or utility scopes — data centers, healthcare facilities, industrial plants — carry the greatest risk. As ConstructConnect noted in its May 13 reporting, “the issue is not just the headline commodity moves, rather it is also about being prepared for volatile prices that can flow through estimates, supplier quotes, and equipment pricing.”
Any bid carrying copper-intensive scopes for longer than thirty to sixty days before procurement needs escalation provisions. In the current market, this is not optional.
Lumber: Pricing That Keeps Grinding Higher, Quarter After Quarter
Framing lumber entered Q2 2026 at $916.62 per thousand board feet (MBF), a 5.11 percent increase from Q1, according to Gordian’s April 2026 lumber price update. That marks the ninth consecutive quarter of year-over-year growth for framing lumber nationally.
The broader market index tells a similar story. The Madison’s Lumber Prices Index for the week ending May 1, 2026, stood at $524 per MBF, according to Madison’s Lumber Report. That figure is flat from the prior week but down 5 percent from one month earlier — suggesting a brief seasonal pause after a strong first-quarter run, not a trend reversal.
The structural reason for lumber’s persistent price pressure is supply-side erosion.
Multiple Canadian lumber mills have closed or reduced capacity. American domestic mills are not positioned to absorb the volume gap in the short term. Meanwhile, tariffs on Canadian softwood lumber imports are now at 10 percent, with lumber derivatives facing a 25 percent duty, per the AGC Tariff Resource Center. That policy environment gives domestic producers room to raise prices independent of import competition.
Construction Dive’s January 2026 reporting framed the cumulative pattern clearly: construction materials costs had been largely stable for nearly three years following the pandemic surge, but the second half of 2025 broke that stability. As the Gordian January 2026 analysis cited by Construction Dive noted, “nonresidential input prices have jumped 44.5 percent since the onset of the pandemic in 2020.” Lumber sits squarely within that cumulative escalation.
Gordian expects another increase in Q3 2026 for lumber, though it will likely remain in the single digits. For commercial contractors using wood framing in mixed-use, multifamily, and light commercial projects, nine consecutive quarters of year-over-year increases is a signal that baseline budget assumptions from even two years ago are materially understated.
Concrete: Elevated, Constrained, and Staying That Way
Concrete tells a different story than the other three materials — not a sharp spike, but a persistent elevation that shows no sign of correcting.
As of April 2026, ready-mix concrete ranges from $135 to $175 per cubic yard nationally for standard 3,000–4,000 PSI mixes, according to Constructem’s April 2026 pricing analysis. Higher-strength specialty mixes and remote-delivery sites can push that figure past $220 per cubic yard. When fuel surcharges — currently running $20 to $55 per cubic yard — are added to the base price, total delivered costs on major commercial pours are substantial.
The Gordian January 2026 analysis captured the outlook accurately: given trends limiting demand for concrete, “it seems likely that prices for these material categories are going to remain constrained for the better part of 2026.”
Diesel is a direct input into ready-mix operations. Batch plants, mixer trucks, pump trucks, and material delivery all run on diesel. With diesel fuel prices up 73.8 percent year-over-year from April 2025, as the AGC documented in its May 2026 release, every cubic yard of concrete placed on a commercial project carries a larger embedded fuel cost than it did twelve months ago.
The asphalt market, which shares many of the same input costs as concrete, saw a 41.0 percent increase in April alone, according to AGC data. That figure is a proxy for how volatile energy-driven construction inputs have become across the board.
For contractors bidding on projects with large concrete scopes — parking structures, tilt-wall industrial buildings, ground-up retail or medical office — locking in concrete pricing early in the bidding cycle is a financial control measure, not just a best practice.
What Is Driving Everything: Tariffs, Energy, and Geopolitical Risk
It is impossible to understand commodity prices in May 2026 without addressing the three forces converging simultaneously on the market: trade policy, energy markets, and geopolitical disruption.
On trade policy: Section 232 tariffs on steel and aluminum now reach as high as 50 percent on items made entirely of those metals. Copper products carry the same 50 percent rate. Softwood lumber faces a 10 percent tariff, with derivatives at 25 percent. These rates have been phasing in since 2025, and their cumulative effect is still working through supply chains.
Tim Jed, supply chain leader at DPR Construction, described the practical reality in an April 2026 Construction Dive report: “A component costs 100 dollars but because of tariffs, it now costs 150 dollars. My supply chain team quickly gets to work to try to find an alternate source.”
On energy: The U.S.-Iran conflict that escalated on February 28, 2026, has pushed oil near $100 per barrel. Natural gas prices jumped 10.9 percent month-over-month in February 2026 alone, per the ABC analysis. Those energy spikes ripple directly through steel production, concrete delivery, and every freight line on a construction budget.
Ken Simonson, AGC chief economist, was direct in a March 2026 statement: “The disruption of oil, natural gas, and aluminum supplies from the Middle East is pushing up construction costs further and causing owners to delay projects.”
On the demand side, the ConstructConnect Spring 2026 U.S. Put-in-Place Construction Forecast projects total construction spending at $2.27 trillion in 2026, up 5.1 percent year-over-year. The private office sector — driven almost entirely by AI data center investment — is projected to surge 25.2 percent in 2026, reaching a cumulative $659.3 billion through 2030.
That concentration of data center activity matters to commodity pricing because data centers are among the most copper-intensive projects in commercial construction. Projects with large power infrastructure, fiber, switchgear, and electrical utility scopes are driving copper demand even as supply remains tight. This is not a cycle that resolves quickly.
AGC CEO Jeffrey Shoaf framed the broader risk in clear terms: “There is a limit to how many price increases the market can absorb before owners put projects on hold.”
Real-World Implications: What Contractors Are Doing Right Now
The contractors most insulated from current commodity volatility share a recognizable set of practices. They are not waiting to see what happens — they are acting on the data now.
Escalation provisions are non-negotiable in current agreements. The AGC Tariff Resource Center specifically recommends using material price escalation clauses — such as the ConsensusDocs 200.1 Material Price Escalation Amendment — at contract signing. Contractors who are not building this language into every agreement are absorbing risk that belongs in the contract, not on their balance sheet.
Early procurement of copper-intensive electrical components, structural steel packages, and prefabricated assemblies is accelerating among large general contractors. DPR Construction’s supply chain team is actively seeking alternative sourcing when tariff-driven premiums reach unacceptable levels. As Jed noted, the process is clear: identify the premium, find alternatives, mitigate the gap before it becomes a change order.
Sector concentration is a deliberate strategy for the firms with the strongest backlogs. Data center construction, power infrastructure, and civil work are absorbing much of the current activity. The ConstructConnect Spring 2026 forecast confirms the strength in these categories — and firms that have positioned their capabilities there are operating with better demand conditions than those concentrated in sectors more sensitive to owner delay.
If your firm needs detailed commodity benchmarking data, current project cost reports, or support navigating procurement strategy in this environment, the team at Commercial Contractor Pros can help. Visit commercialcontractor.net/reports for current data, or call 619-314-4333 to speak directly with a specialist.
What the Data Suggests
The convergence of tariff escalation, energy-driven input inflation, and geopolitical supply disruption makes May 2026 one of the more complex pricing environments commercial contractors have faced outside the pandemic surge years.
The data points toward five conclusions.
First, copper is the most acute risk. An all-time record price, a nearly 25 percent PPI increase in twelve months, and demand factors that are structural — power grid expansion, AI infrastructure, renewable energy — mean copper price pressure has multi-year staying power. Contractors with significant electrical and utility scopes face the highest exposure.
Second, steel has stabilized at elevated levels but is trending upward again. The 7.5 percent quarter-over-quarter increase in April 2026, combined with energy cost pass-throughs and tariff floors, makes another significant Q3 2026 increase highly likely. Early steel procurement and escalation clauses in structural contracts are essential tools right now.
Third, lumber is grinding higher with no near-term correction catalyst. The supply-side erosion from mill closures reverses slowly. Tariff policy on Canadian imports will not change materially in the next six months. Contractors should budget to current price reality, not to historical baselines from 2023 or 2024.
Fourth, concrete is not spiking but it is not retreating either. The embedded diesel cost in every cubic yard of ready-mix means that as long as energy prices remain elevated — with oil near $100 per barrel and diesel up 73.8 percent year-over-year — concrete will remain elevated too. The story here is persistent elevation rather than explosive movement.
Fifth, the gap between input cost escalation and bid price increases is real and widening. Macrina Wilkins at the AGC named it plainly: input costs are rising faster than bid prices. Contractors who do not close that gap through escalation provisions, early procurement, and disciplined scope management will see margin erosion regardless of revenue growth.
The 2026 AGC Construction Industry Outlook projected strong demand for the year, and $2.27 trillion in total construction spending confirms that forecast is materializing. But demand does not protect margins when input costs are outrunning bids.
Closing
The materials market in May 2026 demands precision from everyone it touches.
Owners who believe they can hold projects to budgets set twelve to eighteen months ago are facing a difficult conversation. Contractors who are not building escalation protection into every agreement are absorbing risk that belongs in the contract, not on their balance sheet. And executives who are not tracking commodity price movement as a standing agenda item in their operations reviews are flying blind in a market that is not giving anyone a second chance.
The data is not pessimistic about the industry’s direction. Two-point-two-seven trillion dollars in annual construction spending, with strong sector-level growth in data centers, civil infrastructure, and power facilities, reflects an industry with genuine, durable demand. But demand does not protect margins when input costs are running ahead of bids.
The contractors who navigate this environment successfully will treat commodity pricing as a strategic discipline — not an accounting function. They will know their material exposures by project, by phase, and by procurement timeline. They will use contracts that account for cost reality rather than contracts that ignore it.
The question for every leader reading this is direct: does your current bidding and procurement process reflect May 2026 prices — or does it reflect the market you hoped would exist?
For current commodity benchmarking reports, project cost data, and strategic support, visit commercialcontractor.net/reports or call the team directly at 619-314-4333.
What is your firm seeing in the field right now? Are escalation provisions becoming standard in your agreements, or are owners still pushing back? Share your experience in the comments below — this conversation matters for the whole industry.
Sources
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Associated General Contractors of America. “Surging Materials and Energy Costs Drive Construction Input Prices Sharply Higher in April, Forcing.” May 13, 2026. https://www.agc.org/news/2026/05/13/surging-materials-and-energy-costs-drive-construction-input-prices-sharply-higher-april-forcing
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ConstructConnect. “Copper Prices Hit Record as Cost Pressures Build.” May 13, 2026. https://news.constructconnect.com/copper-prices-hit-record-as-cost-pressures-build
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Construction Dive. “Construction Prices Spiked at ‘Staggering’ Rate to Begin 2026.” March 19, 2026. https://www.constructiondive.com/news/staggering-construction-prices-february-2026/815257/
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Construction Dive. “What Adjusted Steel, Aluminum and Copper Tariffs Mean for Construction.” April 8, 2026. https://www.constructiondive.com/news/adjusted-steel-aluminum-copper-tariffs-construction/816944/
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Construction Dive. “After Years of Stability, Construction Materials Costs Are Rising.” January 23, 2026. https://www.constructiondive.com/news/construction-materials-costs-increase-gordian/810419/
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Construction Dive. “Tariffs Drove Construction Input Prices Up to Start 2026.” February 27, 2026. https://www.constructiondive.com/news/tariffs-construction-input-prices-january-2026/813419/
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Gordian. “What the Data Says: Steel Price Updates.” April 2026. https://www.gordian.com/resources/steel-price-updates/
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Gordian. “What the Data Says: Lumber Price Updates.” April 2026. https://www.gordian.com/resources/lumber-price-updates/
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Madison’s Lumber Report. “Madison’s Lumber Prices Index May 1, 2026: US$524 mfbm.” May 1, 2026. https://madisonsreport.com/madisons-lumber-prices-index-may-1-2026-us524-mfbm/
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Associated General Contractors of America. “Tariff Resource Center for Contractors.” 2026. https://www.agc.org/tariff-resources-contractors
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ConstructConnect. “U.S. Put-in-Place Construction Forecast Report: Spring 2026 Highlights.” April 16, 2026. https://news.constructconnect.com/u.s.-put-in-place-construction-forecast-report-spring-2026-highlights
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ConstructConnect. “Spring 2026 U.S. Construction Forecast: Modest Growth Amid Economic Uncertainty.” March 16, 2026. https://news.constructconnect.com/spring-2026-us-construction-forecast-modest-growth-amid-economic-uncertainty
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Constructem. “How Much Does a Yard of Concrete Cost in 2026?” April 2026. https://constructem.com/how-much-does-a-yard-of-concrete-cost-in-2026/
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Associated General Contractors of America. “2026 Construction Industry Outlook: Demand Shifts, Rising Costs.” January 8, 2026. https://news.agc.org/economics/2026-construction-industry-outlook/C
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