Building materials made of steel, copper and other metals had some of the highest price growth rates in the U.S. in early 2025 in comparison to the previous year. The growth rate of the cost of several construction materials was slightly lower than in late 2024. It is important to note, though, that the figures provided are Producer Price Indices, which cover production within the United States, but do not include imports or tariffs. This might matter for lumber, as Canada's wood production is normally large enough that the U.S. can import it from its neighboring country. Construction material prices in the United Kingdom Similarly to these trends in the U.S., at that time the price growth rate of construction materials in the UK were generally lower 2024 than in 2023. Nevertheless, the cost of some construction materials in the UK still rose that year, with several of those items reaching price growth rates of over **** percent. Considering that those materials make up a very big share of the costs incurred for a construction project, those developments may also have affected the average construction output price in the UK. Construction material shortages during the COVID-19 pandemic During the first years of the COVID-19 pandemic, there often were supply problems and material shortages, which created instability in the construction market. According to a survey among construction contractors, the construction materials most affected by shortages in the U.S. during most of 2021 were steel and lumber. This was also a problem on the other side of the Atlantic: The share of building construction companies experiencing shortages in Germany soared between March and June 2021, staying at high levels for over a year. Meanwhile, the shortage of material or equipment was one of the main factors limiting the building activity in France in June 2022.

Building construction price indexes (BCPI) by type of building and construction division. Quarterly data are available from the first quarter of 1981. The table presents data for the most recent reference period and the last four periods. The base period for the index is (2017=100).

In the fiscal year 2023, the Japanese construction cost deflator for buildings stood at ***** index points, increasing from ***** points in the previous year. The construction cost deflator is a weighted index estimating the inflation-adjusted price development of construction in Japan, considering expenditures for materials, labor, and investment. What are features of the construction cost deflator? Since 1951, the government has been compiling a deflator for construction costs. It helps, for example, to determine contract prices for public works like roads. Today’s version includes various sub-indices, such as the one for buildings; they may be residential or non-residential, and their structural frames may be either wood, steel, or reinforced concrete. While the deflator considers all of Japan, other price indices give more detailed insight into specific buildings, materials, and regions. Rising energy-prices have spilled over to materials Japan has not been spared by recently inflating energy prices. Accordingly, the domestic construction industry is monitoring the monthly construction material price index. Unlike the deflator, it also provides regional-specific data, showing that although inflation impacted all materials throughout the country, some materials and places were more affected than others. In Tokyo, cement prices have increased by over ** points since fiscal year 2021 – in Osaka, by around **.

Graph and download economic data for Producer Price Index by Industry: New Industrial Building Construction (PCU236211236211) from Jun 2007 to May 2025 about buildings, construction, new, PPI, industry, inflation, price index, indexes, price, and USA.

Between 2022 and 2025, the construction price of residential and non-residential buildings in Canada has grown at the same pace. The price of both types of buildings was roughly *** percent higher in the last quarter of 2025 than in 2024, which is the year when the index base was set at 100. Nevertheless, that only considers the cost of buildings in 15 selected metropolitan areas in Canada. Toronto was by far the metropolitan region with the highest construction costs in Canada.

What determines construction costs? The growth rate of the construction price of different types of buildings tends to follow similar trends to some extent. For example, price growth rates in Canada for most types of buildings were more moderate in 2024 than in previous years. However, those figures show a lot of disparity, with the cost of building a high rise apartment building growing much faster than that of other types of buildings. This might be because the construction costs depend on elements such as the location, materials, and complexity of the building, which tend to be quite different for each type of building.

Lumber building materials in Canada In 2024, Canada was the world’s second-largest exporter of wood building materials such as veneer sheets, parquet flooring, particleboard, laminated wood, and builders’ joinery and carpentry. Forestry, logging, and processing wood into ready-to-use materials are important industries in the Canadian economy. High price growth rates of building materials impact negatively the construction industry as their activities become more expensive. However, the forestry and logging industry benefited from the cost of lumber rising in 2020 and 2021. In the past years, the price of lumber, however, has fallen again.

Building construction price indexes (BCPI) by type of building. Quarterly data are available from the second quarter of 1982. The table presents quarter-over-quarter and year-over-year percentage changes for various aggregation levels. The base period for the index is (2017=100).

In 2024, the price of building materials in Mexico increased at a significantly lower rate than in 2021 and 2022. The annual growth rate of salaries in 2024 was much higher than that of the other types of construction costs. Salaries had an annual growth rate from around ***** to **** percent until 2016, since then they have been rising at a faster pace. Building construction, along with transport and urbanization, were the segments that made up most of the production value in the industry.

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Construction Output Price Indices (OPIs) from January 2014 to December 2024, UK. Summary.

The price expectations in the construction sector of the European Union started increasing slightly in the second half of 2024. That price growth, however, seems to be more moderate than previous price hikes. That happened after price growth expectations fell from its peak in 2022. In May 2025, the index reached a value of 3.1, which indicates that there were slightly more respondents expecting the price to keep rising than the ones expecting it to fall.

Germany - Construction cost index was EUR120.50 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Germany - Construction cost index - last updated from the EUROSTAT on July of 2025. Historically, Germany - Construction cost index reached a record high of EUR120.50 points in March of 2025 and a record low of EUR62.60 points in March of 2000.

The construction output price in the United Kingdom has reached an annual growth rate of two percent in September 2024. Construction costs have been increasing at a lower rate than in 2022 and 2023. The year-over-year growth rate reached over 10 percent in May and June of 2022. Public and private housing was the construction segment with the highest output price increase. How have material costs developed over the years? Several factors influence construction material costs, including supply and demand, regulatory requirements, and transportation logistics. Manufacturing efficiency and global trade policies also play a big part, along with economic factors like inflation and currency fluctuations. In June 2022, the price of construction materials for new houses in the UK were 53 percent higher than in 2015. What is the largest component of those costs? Labor costs are often one of the largest expenses in construction projects. That is due to the skilled nature of the work, which has a high demand for specialized trades. The construction sector's labor costs accounted for around 58 percent of the sector's earnings in the United Kingdom in 2023. In the past years, the size of labor costs as a share of the construction sector rose by more than three percentage points, indicating that labor costs have increased at a faster rate than the overall revenue of the industry.

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US Commercial Construction Market Size 2025-2029

The us commercial construction market size is forecast to increase by USD 191 billion at a CAGR of 2.7% between 2024 and 2029.

The Commercial Construction Market in the US is experiencing significant growth driven by the increasing trend towards sustainable building design and the emergence of smart cities. Green buildings, which incorporate energy-efficient designs and renewable energy sources, are gaining popularity due to their environmental benefits and cost savings over time. This trend is expected to continue, with the US Green Building Council reporting that nearly half of all new commercial construction projects in the US are now green certified. However, the market is not without challenges. One of the most pressing issues is the lack of skilled labor in the construction industry. According to the Associated General Contractors of America, over 80% of contractors report difficulty in filling hourly craft positions. This labor shortage is driving up costs and delaying project timelines, making effective workforce management a critical challenge for construction companies. To capitalize on the growth opportunities in the market, companies must focus on innovative solutions to address the labor shortage, such as training programs and partnerships with vocational schools. Additionally, leveraging technology, such as automation and modular construction, can help improve efficiency and reduce reliance on manual labor. Overall, the Commercial Construction Market in the US presents significant opportunities for companies that can effectively navigate these challenges and stay ahead of the trend towards sustainable and smart building design.

What will be the size of the US Commercial Construction Market during the forecast period?

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The commercial construction market in the US is experiencing significant dynamics and trends. Labor force shrinkage and escalating costs are major challenges for office building construction, repair and maintenance, water infrastructure projects, and mixed-use developments. Infrastructure development programs and urban regeneration are driving the need for energy-saving designs, outdoor leisure facilities, and renovation and retrofitting. Product lead times and fluctuating material prices add complexity to retail building projects in the non-residential building market. Labor shortages and rising building material prices are also impacting infrastructure projects and refurbishment and demolition activities. These factors necessitate innovative solutions and strategic planning for US businesses in the construction sector. Market research firms like FMI, Grand View Research, and Juniper Research provide valuable insights into these trends and dynamics.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. SectorPrivate constructionPublic constructionTypeBuildingOthersEnd-userOffice buildingsRetail spacesHotels and hospitalityHealthcare facilitiesOthersGeographyNorth AmericaUSEuropeMiddle East and AfricaAPACSouth AmericaRest of World (ROW)

By Sector Insights

The private construction segment is estimated to witness significant growth during the forecast period.

The commercial construction market in the US encompasses the development of various structures, including restaurants, grocery stores, shopping centers, office facilities, hospitals, and educational institutions. Notable projects, such as the El Paso VA Health Care Center in Fort Bliss, which had its groundbreaking on August 28, 2024, and Skymark Reston Town Center, the tallest residential tower in the Capital Region, which reached its topping out point in October 2023, contribute significantly to this sector's expansion. Infrastructure development programs, such as electric grid reconstruction and water infrastructure projects, are also driving the commercial construction market. For instance, the infrastructure bill, which includes funding for infrastructure projects, is expected to boost the market's growth. Additionally, the non-residential building market is experiencing a surge due to urban regeneration and renovation and retrofitting initiatives. However, the market faces challenges, including labor shortages, cost escalation, and fluctuating material prices. The construction industry's labor shortage is a significant concern, with an estimated 200,000 unfilled jobs in 2023. Furthermore, infrastructure projects often face delays due to labor shortages and rising material prices. The non-residential segment, including office buildings and retail buildings, is experiencing increased demand due to the shift towards energy-saving designs and the need for better communic

Graph and download economic data for Producer Price Index by Commodity: Construction (Partial): New School Building Construction (WPU80110201) from Dec 2005 to May 2025 about schools, buildings, construction, new, commodities, PPI, inflation, price index, indexes, price, and USA.

In 2021, the inflation rate of the cost of steel products in Australia was 30.8 percent. This was the highest inflation rate of all construction materials in the country. On the other hand, construction materials like timber and metal products saw a inflation of 18.4 percent and 13.2 percent, respectively.

In March 2024, Mumbai had the highest construction cost index at 129, while Chennai had the lowest at 124. During the presented period, the construction cost reached its peak in March 2022.

Spain - Construction cost index was EUR119.30 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Spain - Construction cost index - last updated from the EUROSTAT on July of 2025. Historically, Spain - Construction cost index reached a record high of EUR119.30 points in March of 2025 and a record low of EUR19.10 points in March of 1980.

Construction Cost Estimating Software Market Outlook

The global construction cost estimating software market size is projected to grow from USD 1.2 billion in 2023 to USD 2.9 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 10.2% during the forecast period. This significant growth trajectory can be attributed to the increasing demand for efficient project management tools in the construction industry. As construction projects become more complex and large-scale, the necessity for accurate cost estimation and budget management is driving the adoption of specialized software solutions. The integration of advanced technologies such as artificial intelligence (AI) and machine learning (ML) into these software solutions is further enhancing their capabilities, thus fueling market growth.

One of the primary growth factors in the construction cost estimating software market is the escalating complexity of construction projects. With urbanization and infrastructure developments on the rise globally, construction projects are often multimillion-dollar ventures that require precise cost management to ensure profitability. Cost estimating software provides the tools necessary to manage these financial complexities, allowing businesses to consolidate their project costs, forecast potential overruns, and devise corrective measures proactively. Moreover, the pressure to curtail budget overruns and improve profitability is prompting construction companies to adopt these advanced solutions, further contributing to market expansion.

Another critical factor propelling the growth of the construction cost estimating software market is the increased emphasis on digital transformation within the construction industry. As traditional methods of estimation and project management become obsolete in the face of digital innovation, companies are transitioning to more sophisticated software solutions that offer enhanced accuracy and efficiency. The integration of cloud-based platforms allows for seamless collaboration among project stakeholders, facilitating real-time data sharing and decision-making. This digital shift not only improves operational efficiency but also provides a competitive edge in a market characterized by tight margins and intense competition.

Environmental sustainability initiatives are also significantly influencing the construction cost estimating software market. As governments and organizations worldwide push for more sustainable construction practices, there is a growing need to incorporate environmental considerations into project planning and execution. Cost estimating software equipped with sustainability metrics allows companies to evaluate the environmental impact of their projects, optimize resource allocation, and comply with regulatory requirements. This capability not only aligns with global sustainability goals but also opens up new opportunities for companies to differentiate themselves as environmentally responsible entities.

Cost Management Software plays a pivotal role in the construction industry by providing comprehensive solutions for budgeting, forecasting, and financial analysis. As construction projects grow in complexity, the need for robust cost management tools becomes increasingly critical. These software solutions enable construction firms to track expenses in real-time, identify cost-saving opportunities, and ensure that projects remain within budgetary constraints. By integrating with other project management tools, Cost Management Software offers a holistic view of project finances, facilitating better decision-making and enhancing overall project efficiency. This integration is particularly beneficial in today's fast-paced construction environment, where timely and accurate financial insights are essential for maintaining competitive advantage.

Regionally, North America holds a prominent share in the construction cost estimating software market, driven by the presence of major construction firms and a strong focus on technological adoption. The Asia Pacific region is expected to witness the fastest growth during the forecast period, attributed to rapid urbanization and infrastructure development in countries like China and India. Europe also presents significant growth opportunities as it invests in modernizing its aging infrastructure. The Middle East & Africa and Latin America are gradually adopting these solutions, spurred by ongoing construction activities and a growing awareness of digital tools' benefits in managing project costs effectively.

Indonesia Business Survey: Inflation Expectation: Construction data was reported at 3.778 % in Dec 2022. This records an increase from the previous number of 3.680 % for Sep 2022. Indonesia Business Survey: Inflation Expectation: Construction data is updated quarterly, averaging 3.646 % from Jun 2013 (Median) to Dec 2022, with 39 observations. The data reached an all-time high of 7.298 % in Sep 2013 and a record low of 3.180 % in Jun 2021. Indonesia Business Survey: Inflation Expectation: Construction data remains active status in CEIC and is reported by Bank Indonesia. The data is categorized under Indonesia Premium Database’s Business and Economic Survey – Table ID.SD008: Business Survey: Inflation Expectation. [COVID-19-IMPACT]

From 2015 to 2024, the construction output prices of public and private housing increased by ***** percent in the United Kingdom (UK). Meanwhile, the prices of industrial buildings increased by ***** percent during that period, and infrastructure prices by ***** percent. Housing and industrial are the segments that increased the most during that period. Balfour Beatty ranked in the past years as the construction firm with the largest revenue in the UK.