August 28, 2025

2025 Construction Cost Outlook: What’s Moving Prices Now

Mid‑2025 data suggests costs are still drifting upward, but at a slower pace than 2022–2023. Here’s how to set realistic contingencies using public indices and builder cost dashboards.

Signals we watch

• General price level: ENR’s indices continue to edge higher through mid‑2025 — see Construction Cost Index and Building Cost Index.
• Contractor input costs: BLS Producer Price Indexes (PPIs) show mixed movement; the July 2025 release summarizes trends across goods and services (BLS PPI, Jul 2025).
• Market sentiment: Turner and Mortenson report modest quarterly increases with regional variability (see Q2‑2025).

What this means for budgeting

• Carry escalation in the 3–6% annual range for 2025 unless your market shows a sharper trend.
• Use P10/P50/P90 ranges in precon to communicate uncertainty, and track PPIs for concrete, steel, and electrical gear.
• Watch procurement lead times rather than only price—availability shifts your risk profile even when prices stabilize.