The Construction Economist — August 29, 2026

Construction input costs up 7.1% in a year · The 50% Canada duty takes effect · GDP growth slows to 1.5% · The 2027 codes open a lane for off-site construction · Chinese drones meet tariffs

Top News

Construction Input Costs Rise 7.1% as War and Tariffs Push Prices Higher Associated General Contractors of America · ~3 min read

The producer price index for inputs to new nonresidential construction rose 7.1% from July 2025 to July 2026, according to an analysis of federal data by the Associated General Contractors of America (AGC). Liquid asphalt rose 45.2% over the year and diesel fuel 44.2%, while aluminum mill shapes climbed 40.5%, steel mill products 22.5%, and copper and brass mill shapes 18.4%. Lumber and plywood rose 9.9%, the most since March 2022, and average hourly earnings for production and nonsupervisory construction workers rose 5.2%, against 3.2% for the entire private sector.

What it means: The 7.1% headline is an average almost nobody actually pays. Liquid asphalt and diesel ran above 44% while construction plastics rose 5.0%, so a paving job and an interiors fit-out are being priced in two different economies, and a single blended escalation factor will be wrong on both. The harder point is timing: this is the July print, and the 50% duty on Canadian goods — cement and lumber among them — did not take effect until Aug. 22, with Canada's counter-tariffs due Sept. 8. Treat 7.1% as the floor under fourth-quarter escalation rather than a reading of it, and check that fixed-price work carries escalation language naming the specific inputs your scope buys.

What to Know About Trump's 50% Tariffs on Canadian Goods That Just Went Into Effect PBS NewsHour · ~5 min read

A 50% tariff on roughly $20 billion of Canadian imports took effect Saturday, Aug. 22, after trade negotiations collapsed, with cement, lumber and furniture among the covered goods. The duties were imposed under Section 338 of the Tariff Act of 1930, a provision that authorizes tariffs of up to 50% on countries found to discriminate against U.S. businesses, requires no investigation and carries no time limit. Canadian Prime Minister Mark Carney said his government will match the levies dollar for dollar beginning Sept. 8, targeting steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

Project Finance & Economics

GDP (Second Estimate) and Corporate Profits, 2nd Quarter 2026 U.S. Bureau of Economic Analysis · ~4 min read

Real gross domestic product increased at an annual rate of 1.5% in the second quarter of 2026, according to the second estimate released by the Bureau of Economic Analysis. That follows a 2.1% increase in the first quarter. BEA attributed the second-quarter increase to consumer spending, exports and investment, partly offset by a decrease in government spending.

PCE Inflation Remains Sticky NAHB Eye on Housing · ~2 min read

The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures price index, remained sticky in July, according to the National Association of Home Builders' reading of the latest BEA report. Real consumer spending was unchanged for the month. NAHB described household spending as resilient but showing signs of slowing amid persistent inflation.

Policy, Codes & Regulation

2027 International Codes Add Provisions to Accelerate Off-Site Construction and Support Housing Affordability International Code Council · ~3 min read

The 2027 International Codes, including the International Building Code and the International Residential Code, now incorporate provisions that streamline the approval of off-site construction. The Code Council said the changes are aimed at supporting housing affordability.

Trump Administration Proposes Sweeping Changes to Small Business Size Standards AGC News · ~2 min read

The Small Business Administration has proposed a rule revising the size standards that determine which firms qualify as small businesses. AGC said the rule could significantly expand the number of businesses eligible for federal contracting set-asides and SBA assistance programs.

Tech & Tools

Chinese Drones, Now Facing Tariffs, Are the Top Choice of US Builders Construction Dive · ~3 min read

Among survey respondents who fly drones on jobsites, 97% said their primary machines are built by China's DJI, and the second most-cited brand is also Chinese. Those aircraft now fall under U.S. tariffs.

Kairos Power Pushes to Make Nuclear Construction Repeatable ENR · ~4 min read

Kairos Power, contractor Barnard and researchers at the Department of Energy's Oak Ridge site are applying lessons from early reactor builds to the cost, schedule and code barriers facing advanced nuclear deployment. The effort is aimed at making reactor construction repeatable rather than bespoke.

The Construction Economist — What's Moving Construction? The Economic Look-Ahead.