Construction Material Price Index Rises 6.8% Year-on-Year in September 2026 Amid Global Energy Tensions

Key summary

The Office of Trade Policy and Strategy (OTOP) reported that the construction material price index for September 2026 stood at 113.7, representing a year-on-year increase of 6.8% compared to September 2025. This rise was driven by higher prices across nearly all categories, primarily due to elevated oil and energy costs stemming from prolonged geopolitical conflicts in the Middle East, where negotiations between the United States and Iran remain unresolved. Additionally, Saudi Arabia's closure for repairs on the East-West Pipeline, damaged by an attack, has further increased global risks to oil and energy supply. The index increases were detailed as follows: Wood and wood products rose 4.3% due to higher raw material and transport costs linked to oil prices; Cement increased 0.3% driven by higher coal-based energy costs; Concrete products surged 9.2% because of rising raw materials (cement, stone, sand) and diesel transport costs; Tiles climbed 4.0% as production costs rose with natural gas prices; Surface finishing materials grew 2.2% following increases in raw material prices such as pigment powder and epoxy resin; Sanitary ware advanced 4.8% due to higher production inputs; Electrical and plumbing equipment jumped 13.3%, largely because copper prices hit multi-year highs driven by tight supply from halted mining operations and surging demand for infrastructure and data centers; Other construction materials rose 19.8%, with asphalt prices climbing significantly due to petroleum product impacts and natural materials increasing due to higher fuel costs for machinery. Conversely, the iron and steel products category fell 0.8% as competition intensified among smooth round bars, ribbed round bars, H-beams, and galvanized sheets. Looking ahead, the fourth quarter index is expected to continue expanding compared to the same period last year. Key factors include persistently high oil and energy costs due to ongoing geopolitical conflicts in regions like the Middle East and Russia-Ukraine where negotiations are unresolved; sustained demand for construction materials from government projects on infrastructure, utilities, and repairs following disasters; and rising global prices for basic metal raw materials like copper and aluminum driven by increased demand for infrastructure and clean energy projects.