Input prices for new nonresidential construction rose 1.8% in May and 8.4% year-over-year — the largest year-over-year increase since November 2022 — according to producer price index data the Bureau of Labor Statistics posted on June 12, 2026. AGC chief economist Ken Simonson analyzed the construction-specific data in the June 8-12 Data DIGest (Source: AGC, citing BLS PPI May 2026, constructioncitizen.com, June 12, 2026). The increase far outpaced the 3.5% year-over-year rise in the PPI for new nonresidential building construction — a measure of what contractors say they would charge to build. Input costs are climbing at 8.4%. Revenue per project is climbing at 3.5%. That gap is margin compression, and it is the operating environment for every Texas contractor pricing work in summer 2026.
The composition of the May increase matters for understanding where the pressure is concentrated. The diesel fuel PPI soared 20% in May and 106% year-over-year, contributing to increases in the index for truck transportation of freight of 3.4% and 17%, respectively. The index for aluminum mill shapes rose 4.2% for the month and 49% year-over-year. The PPI for copper and brass mill shapes climbed 4.3% and 27%, respectively. No construction-related price declines were reported.
“Input prices for new nonresidential construction rose 1.8% in May and 8.4% year-over-year, the largest year-over-year increase since November 2022. The increase far outpaced the 3.5% year-over-year rise in the PPI for new nonresidential building construction, a measure of what contractors say they would charge.”
Source: AGC Data DIGest, citing BLS Producer Price Index May 2026 · constructioncitizen.com · June 12, 2026
For Texas contractors, aggregate and road base are not directly tariff-exposed and do not appear in the indexes driving the aluminum and steel components of these numbers. But diesel is. And every delivered load of aggregate in Texas runs on diesel. The 20% monthly increase in the diesel fuel PPI and the 106% year-over-year number reflect the magnitude of the fuel cost shock that has been running through hauling surcharges since late February. As the EIA’s June STEO projects diesel moving lower through Q3 and Q4, the PPI data confirms how far the system traveled in the opposite direction first.
The critical takeaway for contractors is the gap number itself. When input costs rise at more than twice the rate of what contractors can charge, every job where materials were priced before the May PPI spike carries exposure. Market Intelligence – Any bid submitted before June that used Q1 2026 materials pricing as the input assumption is likely underestimating the actual cost environment as of June 12.
The BLS May PPI release is the most comprehensive picture yet of what the 2026 cost environment is actually doing to the construction industry. Input costs are rising more than twice as fast as bid prices. Getting current on every materials line item before the next bid is not optional in this environment.