According to a press release from the Associated Builders and Contractors, construction materials increased in February, primarily due to increasing prices in copper, lumber, and steel. These increases were further exasperated by the ongoing conflict in Iran, which is likely to increase the cost of diesel and natural gas further. Here’s what you need to know.
Construction materials have increased an average of 3.1% year-over-year in February according to a press briefing from Anirban Basu, chief economist ABC. However, that low percentage doesn’t tell the entire story. Prices rose a staggering 12.6% in the first two months of 2026, and this increase was calculated before the start of the Iranian conflict on February 28th, 2026. The highest individual increases year-over-year were felt in natural gas, copper products, and steel mill products, with natural gas being the highest increase at around 30%. It’ s important to note that an increase in natural gas cascades into an increase of other materials. For example, steel requires natural gas in its refinement and production, so an increase in cost of natural gas follows through and increases the price of steel.
Many of these increases are a continuing trend due to international trade policy, specifically tariff policies. And while a court struck down the Trump Administration’s international tariffs, industries have been slow to adjust. In 2025, goods from Canada, Mexico, and China made up around 41% of imports into the United States, and the effective tariff rate of 12% during that year increased the price of lumber, steel, aluminum and other materials vital to residential, industrial, and other construction projects.
Data center construction and expansion has also driven the cost of steel and copper. Updates to aging power grids and the internal wiring for these centers both factor in the increase in copper prices of 27.1% year over year. With data center project planning steadily increasing in the latter part of 2025 and the start of this year, copper could potentially see a further larger increase year over year.
The US/Iranian conflict will most likely exacerbate these conditions. The combination of strikes on key Iranian fossil fuel infrastructure and the closure of the Strait of Hormuz has limited the amount of oil exported to the U.S. from Middle Eastern oil fields. The average gas price for unleaded gasoline has risen at least $1 per gallon since the conflict began, with higher increases in more populated areas. The cost of diesel, which most heavy machinery runs on, has risen along similar lines with cost rising to over $5 a gallon, which is a rate that hasn’t been seen since mid-2022 when pandemic-connected supply chain issues arose. With these increases we could see additional cost increases across the construction industry, from material costs to fuel consumption.
Order Heavy Equipment Parts Online 24/7
Visit the ConEquip Online Store
Search by part number or machine model for fast results.
Optimism Despite the Turmoil
Despite this reporting and predicted cost increases, many contractors are holding onto optimism. According to Basu in the ABC press release, “fewer than 1 in 4 contractors expect their profit margins to shrink over the next several months.” Contractors may maintain profit margins by increasing job budgets to reflect the changes, but even that strategy may have a ceiling. Like many of the past industry reports, the future remains uncertain, but optimistic. Despite the increasing prices, other factors within the budgeting process seem to be adjusting to offset the cost. For now, the industry watches the larger political stage and makes necessary changes to land on its feet.
No Call Needed—Just Click and Buy
Order Heavy Equipment Parts Online
Simple checkout, live inventory, and 24/7 access to parts.
