05/15/2026
Construction input costs climbed 6.2% between January and April 2026. That four-month move outpaced the cumulative increase of the previous three years combined.
Energy is doing most of the damage. Crude petroleum is up 61.8% year-over-year. Unprocessed energy materials up 48.9%. Natural gas up 27.3%. And those commodity spikes don't stay at the commodity level — they flow through steel, asphalt, glass, transportation, and every fabricator in your supply chain.
But here's the number that matters more than the headline: by the time construction inflation travels through a GC, their subs, the subs' suppliers, and four layers of stacked markup, most developers are absorbing something closer to 12–18%. The BLS index sets the floor. The industry's fragmented structure builds the ceiling.
I wrote about exactly this in the latest issue of The Daniel Kaufman Real Estate Development Report — what the data actually shows, why the layers matter more than the index, and how Kaufman & Company's vertically integrated model is built specifically to eliminate the cost-stacking problem.
This is the environment we're operating in. The developers who survive it will be the ones who control their own supply chain and tell their capital partners the truth about what things actually cost.
Full report here 👇
https://www.tumblr.com/dkaufmandevelopment/816702361549651970/the-daniel-kaufman-real-estate-development
