New York City’s building boom may be brought to a halt by something more mundane than monetary policy or global financial disruptions — it could be as simple as copper, diesel, and steel.

By the end of next year, the Producer Price Index for construction inputs — the price of materials that are used in a construction project plus the cost of diesel fuel — will rise by as much as 8% and continue to do so indefinitely, according to a report released yesterday by the Associated General Contractors of America (available for download here). This is a drastic change from the previous 12 months, which saw construction inputs inch up just 1.6% for the year ending in August.

“This is a warning note,” the chief economist at AGC, Ken Simonson, the author of the report, said. “Even a small percentage change can mean the difference of hundreds of millions of dollars in large projects in New York.”

Higher prices for building materials, compounded by a weak dollar and problems in the credit market, could put in jeopardy some of the billions of dollars worth of development projects now under way in the city. Among these projects are the $3 billion expansion of the Jacob K. Javits Convention Center, the $14 billion redevelopment of Pennsylvania Station and Madison Square Garden, and the $2 billion expansion of the no. 7 subway line.

“This report is offering a global view that people in New York have to pay attention to,” the executive director of the General Building Contractors of New York State, Jeffrey Zogg, said.

After years of minimal increases in the costs of building materials, prices skyrocketed between 2004 and the middle of last year. In fact, the cumulative increase in construction inputs since December 2003 is 28% — more than double the 13% increase in the Consumer Price Index, the most common measure of overall inflation.

Since mid-2006, however, there has been a pause in the unrelenting upward trajectory of construction costs, with several materials even dropping in price. For example, the price of gypsum dropped 21% and that of asphalt decreased by 19%. Copper pipe wire and fixtures, meanwhile, increased by only 2.6% after spending the past three years rising by 30% or more.

“We had an odd confluence of events to create this recent price drop, including the decline in the housing market and a cooling off of the overall U.S. economy,” Mr. Simonson said.

Now, however, prices are once again poised to escalate. Reasons include a revival of the homebuilding market, which Mr. Simonson expects will grow strong again by the second half of 2008, and the expansion of the Asian economies. Copper and diesel will see double-digit price increases, while steel and concrete will be up by 5% to 10%, he said.

“For instance, the price of diesel fuel would have to fall 55 cents per gallon by January 2008 to match the January 2007 level,” Mr. Simonson wrote in the report. “Such a sudden decline is possible but unlikely at a time when crude oil prices have recently been setting record highs.”

Even with prices on the rise, not everyone is expecting a doomsday scenario.

“Commodity increases don’t have as direct a correlation with construction activity in New York as they do in other markets,” a senior vice president and general manager of the New York operations at Turner Construction, Charles Murphy, said. “It is really overhead and profit that is more of a major factor.”

Still, while Mr. Murphy is not as concerned about the rising costs of materials, “there are some clouds out there,” he said. “A lot of our work is with the financial institutions and who knows how their recent third-quarter write-downs are going to affect their construction projects.” Bank of America, Goldman Sachs, and J.P. Morgan Chase are constructing new headquarters, while earlier this week Morgan Stanley announced its plans to also construct a new headquarters in Manhattan.