Your Costs Went Up 8 Percent. Or 78 Percent. Or Down 1 Percent.

Every trade publication ran the same headline this month. Construction input costs up 8.9 percent over the year. If you own a restoration shop, that number is close to useless to you, and acting on it will cost you money.

Not because it is wrong. It is right. It is a composite, and a composite is an average of things that did not move together.

What the data actually says

The Associated General Contractors publishes a monthly compilation of Bureau of Labor Statistics producer price index series for construction. The table updated September 10, 2026 covers the twelve months ending August 2026. Here is the spread hiding inside that 8.9 percent. According to that AGC compilation of BLS series:

• Gypsum building materials: down 0.9 percent
• Insulation materials: up 1.1 percent
• Architectural coatings: up 2.0 percent
• Plastic construction products: up 4.8 percent
• Sheet metal products: up 6.8 percent
• Lumber and plywood: up 8.3 percent
• Copper and brass mill shapes: up 20.9 percent
• Steel mill products: up 23.4 percent
• Aluminum mill shapes: up 27.3 percent
• Number 2 diesel fuel: up 77.8 percent

Minus one to plus seventy eight, same twelve months, same industry. No real job mix experienced "8.9 percent."

One honest note on diesel, because it is the loudest number on that list. It is a twelve month change measured off a falling base. The same BLS series averaged down 24.9 percent in 2023, down 15.2 percent in 2024 and down 9.8 percent in 2025. Diesel is not at a record. It rebounded hard off three years of decline. Treat it as a real cash cost, not as an emergency.

Now translate it to your job mix

A water mitigation job is drywall, insulation, paint, some plastic products, and trucks. Look at that list again. The materials in that basket barely moved. The trucks did. Fuel up 77.8 percent, and truck transportation of freight up 14.3 percent.

So the mitigation shop that read the headline, concluded "materials are up 9 percent" and went looking for savings in materials was looking in the wrong place. Their squeeze is in vehicles and delivery.

Reconstruction is a different basket entirely. A roof, a service upgrade, structural metal, mechanical work. That is steel at 23.4, copper at 20.9, aluminum at 27.3. Those jobs genuinely absorbed a fifth to a quarter more on their metal line items.

One company, two divisions, two completely different cost stories, and one composite number that describes neither of them.

The half nobody quotes: your price, not your cost

Cost is one side. BLS also publishes what contractors charge.

Over the same twelve months, the price index for maintenance and repair of nonresidential buildings rose 5.1 percent while the inputs to that same work rose 9.6 percent. That 4.5 point gap is my subtraction of two published figures, not something BLS prints. New nonresidential building construction prices rose 5.3 percent against 8.9 percent inputs, a 3.6 point gap on the same arithmetic.

That gap is not a mystery. That gap is contractors eating it.

BLS does not publish an output price index for residential repair work, so I cannot show you the same gap on the residential side, and I am not going to pretend otherwise. What I can tell you is the input side: inputs to residential maintenance and repair rose 8.0 percent, inputs to new residential construction 7.8 percent. The cost pressure is there. Whether residential contractors passed it through is not in the data.

Restoration has a structural reason to suspect they did not. You largely do not set your price. A published price list does, and any price list is built from costs surveyed over a prior period and then released on a schedule. That lag is not a conspiracy, it is arithmetic, and in a flat cost year it is invisible. In a year where one of your inputs moved 78 percent, that lag is your margin.

Four moves

1. Stop reading the composite. Build a one page list of the eight or ten line items that actually show up on your jobs and track those series instead. They are free at bls.gov. Call it fifteen minutes a quarter.
2. Split mitigation and reconstruction in your cost tracking. If they share a cost center, you will never see that one division's inputs moved 2 percent while the other's moved 23. You will only see a blended number that is wrong for both.
3. Supplement to current cost, with the paper attached. A price list that has not caught up is precisely the situation a supplement exists for. "Prices went up" is not documentation. A dated invoice is.
4. Reprice your own controllables. Fuel surcharge policy, delivery terms, rental agreements. Construction equipment rental and leasing rose only 2.1 percent over the year, and the equipment itself 2.2 percent. If your rental and haul costs outran that, the problem is your terms, not the market.

None of this is hard. It is one afternoon, and it is the kind of work that never happens because it is never urgent until the year closes and the margin is already gone.

That is a fair description of what the CFO seat actually does for a restoration company: watch the handful of inputs that move your jobs, and make sure your billing moves with them instead of twelve months behind them. If you want help building that one page list against your own job mix, that is what the CFO subscription is for, and you can start a conversation here.

General guidance for restoration and reconstruction owners. Not a substitute for advice tailored to your company's numbers.

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