Construction Costs Are Rising While Contractor Backlogs Shrink — What This Means for 2026 Projects

The U.S. construction industry is entering a new phase — one defined by rising material costs and shrinking contractor backlogs. According to new data from Associated Builders and Contractors (ABC), construction material input prices rose 3.5% between October 2024 and October 2025, while contractor backlog fell to 8.4 months, the lowest level since May.

For property owners, builders, and developers preparing for 2026 projects, this combination signals one thing: uncertainty is back, and careful planning matters more than ever.

Material Prices Continue to Climb

The report shows notable increases in several essential categories:

• Concrete products

• Electrical equipment

• Steel and metal inputs

• HVAC and mechanical components

• Transportation and freight costs that continue to fluctuate

These increases follow two years of already elevated pricing. While overall inflation has slowed, the cost of building materials has not — leaving many contractors navigating higher-than-expected costs even on long-planned projects.

For roofing specifically, products containing steel, underlay materials, and specialty components have all seen price pressure. That reality affects both bid accuracy and project timelines.

Backlog Is Shrinking — Especially for Smaller Firms

The ABC Construction Backlog Indicator dropped to 8.4 months, with the steepest declines occurring among:

• Small- and mid-size contractors

• Firms dependent on institutional or commercial projects

• Contractors without access to large industrial or megaproject work

When backlog shrinks at the same time material prices rise, contractors often face:

• Tighter margins

• Reduced ability to forecast workload

• Hesitation among owners to start new builds

• More cautious bidding strategies

For developers and property owners, this environment can result in fewer immediate options and increased competition for qualified contractors — especially those with strong reputations and reliable crews.

What This Means for 2026 Construction & Roofing Projects

Whether you’re planning a renovation, roof replacement, new build, or commercial expansion, the 2026 market is likely to include:

1. Higher Project Costs

Budget buffers are no longer optional. Material volatility means some projects may cost 5–15% more than originally estimated if materials aren’t locked in early.

2. Longer Lead Times

Suppliers are warning of potential slowdowns in:

• Metal roofing components

• Specialized fasteners

• Certain underlayments

• Electrical and HVAC-adjacent materials

Ordering early will prevent mid-project delays.

3. Increased Importance of Contractor Selection

With backlogs shrinking, more contractors may take on unfamiliar or overly aggressive workloads. Owners should prioritize:

• Proven experience

• Stable subcontractor relationships

• Transparent pricing

• Strong project management

4. Value Engineering Becomes Crucial

Smart adjustments — such as choosing alternative materials or revising scope without compromising quality — can help offset rising costs.

How BHR Roofing Helps Clients Navigate a Shifting Market

At BHR, we monitor construction pricing, supplier forecasts, and backlog trends because our customers rely on accurate information to make financially sound decisions.

Here’s how we support you:

• Upfront, transparent pricing that reflects up-to-date material costs

• Early procurement strategies to lock in pricing when possible

• Strong local partnerships ensuring dependable material supply

• Detailed project planning to prevent delays or unexpected budget changes

• Residential & commercial roofing expertise backed by 20+ years in the field

Whether you're a homeowner preparing for a full roof replacement or a commercial client planning a 2026 expansion, we help you avoid surprises and stay ahead of market shifts.

Looking Ahead to 2026

Rising costs and shrinking backlog don’t have to derail your project. With informed planning, a trustworthy contractor, and an understanding of current trends, owners can still complete projects on time and within budget.

If you’re considering a roofing project in 2026, now is the right time to have a conversation.

📞 Ready to plan ahead?

Visit BHRRoofing.com or call us today to schedule your free consultation and cost review.