An estimator in York prices a structural steel package in February. The owner signs in April. Between those two dates the mill moved twice, freight moved once, and the contractor absorbed the difference. Nobody decided to absorb it. The number went out, the customer said yes, and the margin quietly left the building.
That is no longer an anecdote. It shows up in federal data, and it shows up in two different industries at the same time.
The Associated General Contractors of America found that the producer price index for inputs to new nonresidential construction rose 6.6 percent in the year through April 2026, while the index measuring what contractors say they would charge to build a fixed set of buildings increased just 3.6 percent. Their analysis of April producer price data puts a number on something owners already feel. Three points of spread is not a rounding error. It is margin that never reached a customer.
The underlying moves are sharper than the headline. Aluminum mill shapes rose 37.3 percent over the year, copper and brass mill shapes 20.9 percent, and fabricated structural metal bar joists and rebar 13.6 percent. Diesel climbed 73.8 percent from a year earlier, and truck freight rose 15.2 percent. AGC’s director of market insights, Macrina Wilkins, tied that spread directly to the difficulty of pricing projects accurately.
The same gap shows up in Pennsylvania manufacturing
Construction is not alone in this. The Federal Reserve Bank of Philadelphia surveys manufacturers across eastern and central Pennsylvania every month and asks two questions that sit right next to each other: are the prices you pay going up, and are the prices you charge going up?
Those two lines have not moved together all year. In June, the prices-paid index sat at 53.2 against a prices-received index of 20.3. In July the prices-received index rose seven points to 27.4, with almost 27 percent of firms reporting increases in the prices of their own goods and 73 percent reporting no change. Roughly three out of four Pennsylvania manufacturers held their price flat in a month when their own input costs were still climbing.
Two industries, two data sets, one pattern. Costs are being passed to these companies faster than these companies are passing them on.
Passing on price increases is a sales problem
Most owners read that gap as a procurement failure or an estimating failure. It is neither. Estimating produced a defensible number. Purchasing found what the market offered. The number then went to a customer, and something broke on the way.
Ask a sales manager who owns the price conversation and the answer is usually a shrug. The estimator built it. The owner reviewed it. The rep delivered it. No single person is responsible for defending it, so nobody rehearses for it, and a conversation nobody rehearses is a conversation people avoid.
Avoidance is expensive in a specific way. It shows up as a rep who shaves two percent before the customer has objected to anything, because the rep is bracing for an objection that has not arrived yet.
Three places the conversation breaks
The number arrives without a person attached. A revised price lands by email at 4:40 on a Thursday. The customer reads it alone, with no context and nobody to ask. Every question they form goes unanswered until they either accept or push back hard.
The rep cannot explain the increase. A seller who cannot describe which input moved, by how much, and over what period is left arguing from feeling. A seller who can name the metals index and the freight index is having a different conversation entirely, one where the increase belongs to the market rather than to the company.
The old number never expired. A quote with no stated shelf life is a quote the customer reasonably believes still stands. That is a document problem with a sales consequence, and it is worth its own treatment. See how to set a quote validity period that matches your cost cycle.
What a repeatable price conversation looks like
Three things make this teachable rather than personal.
Name the owner. One person carries the price conversation for each account. Not the estimator who built the number and not whoever happens to answer the phone.
Fix the sequence. The order matters more than the words. Confirm what the customer is solving, restate the scope, name the input that moved with its source, give the number, then stop talking. Most reps invert this and lead with the number.
Set the trigger. A cost threshold or a calendar date, agreed in advance, that starts the conversation before the customer discovers it on an invoice.
Existing accounts need a different version of all three, because a renewal carries history a new bid does not. That distinction is covered in what to ask existing accounts before renewal price increases go out.
The Philadelphia Fed’s monthly survey of regional manufacturers will publish the same two indexes next month. The question worth asking is which of those two lines your own company is on.
Scorecard Sales: B2B Sales Training in York, PA
Scorecard Sales was founded in 2020 by Aaron Jacobs, an MBA with more than 20 years selling. The company works with construction, manufacturing, and insurance teams across South-Central Pennsylvania, turning what top performers do into a process the rest of the team can learn.
Our Services Include:
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Works Cited
- Associated General Contractors of America. “Surging Materials and Energy Costs Drive Construction Input Prices Sharply Higher in April, Forcing Contractors to Pay More for Key Supplies.” Associated General Contractors of America, 13 May 2026, www.agc.org/news/2026/05/13/surging-materials-and-energy-costs-drive-construction-input-prices-sharply-higher-april-forcing.
- Federal Reserve Bank of Philadelphia. “Manufacturing Business Outlook Survey: July 2026.” Federal Reserve Bank of Philadelphia, July 2026, www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2026-07.
