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During the first half of the year, a word continued to appear in headlines surrounding a wide economic and political change: “uncertainty”. The series of the uncertainty of the construction of Dive seeks to deepen in various topics that turn with the uncertainty to explore how we have come here and what the future is.
Uncertainty about commercial policy and its impact on the costs of materials could lead to more contractors to cling to the shovels that hit the ground.
Construction entry costs increased by 6% In May, more than 40% since February 2020 have continued to increase, according to the U.S. Work Statistics Office. This leap follows several months of political uncertainty, with unequal tariff ads and flow implementation deadlines.
In fact, contractors say that tariffs have already triggered delays in certain projects. Pittsfield, for example, recently recently recently recently They fired 233 workers After the postponement of two great contracts due to the volatility of the price of steel. The prefabricated manufacturer said that delays led to significant financial pressure, temporarily reducing his backlog and forcing the company to cut almost half of his workforce.
Much of the confusion comes from how President Donald Trump has shot Rates this year. The Trump administration initially suspended many specific functions in the country, and then announced in July that they would resume on August 1 for trade members without agreement. This has let many construction companies not be sure how to plan contracting.
“The impact of rates will affect not only the price or cost, but also the amount consumed of these assets,” said Michael Guckes, a chief economist in Constructconnect, a building supplier based on Cincinnati. “Many rates have been delayed, sometimes it can now mean that more inflationary pain is produced.”
Taxes will directly affect the components of key construction, that is, receive, Structural Steel, Copper and Aluminum, said Michael O’Reilly, vice president of the Rider Levett Bucknall, a New York construction consulting firm.
“Given the current landscape, we foresee the continuous volatility of material prices during the second half of the year,” said O’Reilly. “It seems unlikely a significant decrease in costs without more clarity or stabilization in commercial dynamics.”
If the costs of the materials remain high, this could extend the Caution already catching —S In the parts of the construction industry, O’Reilly said. Much of this reaction will depend on how the administration policies and the broader economic conditions are evolving in the coming months.
“Contractors adapt where, through smarter contracting, narrower projects planning and more selective offers,” said O’Reilly. “Although uncertainty remains, the industry remains agile and closely looks at the stabilization signs that could unblock more activities in the second half of the year.”
Contractors change hiring strategies
Although the whipsaw of changing or delaying rates may not be as constant as the previous days of the Trump administration, the new changes continue to unfold.
The United States announced plans to install a 50% Copper import rateA common material on data center projects, from August 1. The movement follows the increase steel and aluminum rates 25% to 50% earlier this summer.
Despite the rate ascents, however, Activity planning was bounced In June, according to the Dodge construction network.
However, this growth has not completely erased volatility or restlessness. This is because if more rates are moving forward as it is proposed, Additional price pressure According to construction economists, it could be materialized in the second half of the year.
“In the five months ending the year, construction material prices have generally increased by 5.8%, which makes the latest rise in prices one of the most steep records,” said Guckes. “Only sometimes in the last twenty years we have seen this meteorological price increase, including 2007, 2017 and 2020.”
The additional rates press contractors once again for more information Problems of availability of imported specialized materials. The shortcomings of these product categories have triggered the delays of the project in the past, especially when the owners are reluctant to use substitute products.
These problems will put a lot of private construction activities. Private developers have already disabled more projects in May that in any other registration month. Cancellations under private construction jumped 62.6% in May, according to the latest construction data from Constructconnect.
Potential resolutions
To avoid interruption, some companies are renewing their approach to alternative hiring strategies, said O’Reilly. Includes early work packages, bulk shopping and storage of warehouses.
Concord, Swinerton, based in California, has increased his Use of massive woodA method less affected by steel and aluminum rates. The movement helped to mitigate the risk and improve the calendar and budget efficiency, said Kevin Smith, Vice President of the Swinerton Carolin Division.
Its massive wooden subsidiary, Timberlab, has later taken the strategy Vertically integration of your supply chain. With domestic manufacturing facilities already online and a sawmill scheduled for 2027, the company has reduced its confidence in steel and imported beams, said Chris Evans, president of Timberlab.
“These strategies should be transparent and developed in close collaboration with project owners to proactively manage the risk,” said O’Reilly. “One of the key approaches is to explore alternative materials that can be obtained nationally or from countries with less interruptions related to rates, helping to stabilize costs and deadlines.”
Concern of capacity
Guckes said that the United States does not have the labor or the ability to quickly replace construction materials imported by domestic production. Participation of the labor force It is already close to the highest record and unemployment is still low, which means that few employees are available for companies to hire.
Therefore, even if these factories are carried online, the current workforce is not large enough or formed for the scale and types of property in the construction industry that currently depends on Guckes.
As material costs continue to increase in the midst of restricted capacity, the result could be a stagflation period, where contractors are confronted with both decrease in demand and increasing prices by 2026, said Guckes.
“Our workforce is not qualified or physically great enough and with sufficient free capacity, to produce the types and volumes of goods we currently care about,” said Guckes. “Complete execution of the presidential administration’s fare strategy and, therefore, would be logically translated into both increased prices and reduced consumption volumes.”
These interconnected factors, along with the flow of private capital, the sentiment of investors and the dynamics of immigration, will probably determine the rhythm and resilience of the construction pipes that advance, said O’reilly.
“Although recent fare activity has been a factor, it has not been the main driver of construction trends by 2025,” said O’Reilly. “Looking forward, the construction activity of the second half of the year will probably be more made up of the macroeconomic forces than only by the rates.”
