The implementation of some tariffs in the early days of the Trump administration pushed prices for construction materials and services higher—and prices should rise even more now that additional tariffs are in place, according to an analysis of government data by the Associated General Contractors of America (AGC) released last week.

Prices for materials and services used in nonresidential construction on average rose 0.5% in February, following an increase of 0.7% in January, after the Trump administration instituted some tariffs on China and threatened to impose more on that country, as well as Mexico and Canada, according to AGC’s analysis.

For electrical contractors specifically, nonresidential building work prices in February rose 2.5% from a year earlier.

“It’s a bad sign that construction costs have been rising significantly even before most of the Trump administration’s tariffs have taken effect,” AGC’s chief economist Ken Simonson said in a press release. “Now that many tariffs that hit construction materials are in effect, with more measures pending, construction costs are likely to rise much more.”

The producer price index also rose for two months in a row, while the index based on what contractors report they would charge to put up a specific set of buildings fell by 0.1% in February, following an increase of 0.3% in January. This means that contractors have not been able to pass along the producers’ cost increases enough to maintain their own profit margins, Simonson said.

The price data from the Bureau of Labor Statistics was collected by AGC around Feb. 11, 2025, after a 10% tariff on China took effect on Feb. 4 and numerous tariffs were already in effect, Simonson said. Since then, the Trump administration has imposed new tariffs of 25% on steel and aluminum imports, 25% on many goods from Mexico and Canada and 10% on imports from China.

Moreover, the Trump administration has threatened to impose additional tariffs in early April and potentially steep fees on ships delivering cargo to U.S. ports. This will likely cause construction materials and services prices to rise even more—and could result in stymying production altogether, says Jeffrey Shoaf, CEO of AGC.

“The irony is that the tariffs’ impacts on construction costs might just price some manufacturers out of their decision to expand or add plants in the U.S.,” Shoaf said.