{"id":30941,"date":"2025-06-17T05:47:29","date_gmt":"2025-06-17T12:47:29","guid":{"rendered":"https:\/\/essential.construction\/news\/construction-costs-jump-at-a-6-annualized-rate\/"},"modified":"2025-06-17T05:47:29","modified_gmt":"2025-06-17T12:47:29","slug":"construction-costs-jump-at-a-6-annualized-rate","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/construction-costs-jump-at-a-6-annualized-rate\/","title":{"rendered":"Construction costs jump at a 6% annualized rate"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><\/p>\n<p>            <img decoding=\"async\" class=\"text-to-speech__button__icon\" src=\"https:\/\/www.constructiondive.com\/static\/images\/audio_icon.svg?482016190122\" alt=\"-\"><\/p>\n<p>        Listen to the article<br \/>\n        <span class=\"text-to-speech__button__audio-length\">4 min<\/span><br \/>\n    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"https:\/\/res.cloudinary.com\/dmgi9movl\/video\/upload\/q_1\/v1749842675\/news\/text_to_speech\/construction-costs-jump-tariff-iron-steel-aluminum_b9zh1z.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/contact\/\" target=\"_blank\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<h3>Dive Brief:<\/h3>\n<ul>\n<li><a rel=\"nofollow noopener\" href=\"https:\/\/www.abc.org\/News-Media\/News-Releases\/abc-tariffed-construction-materials-prices-rise-in-may\" target=\"_blank\"><span><span><span><span><span><span><span>Construction input prices increased 0.2%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> in May due to spikes in the cost of iron, steel, copper and aluminum, according to an analysis by Associated Builders and Contractors of U.S. Bureau of Labor Statistics data.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Input prices are now 1.3% higher than a year ago overall, and 1.6% higher for nonresidential construction, with tariff-related price increases largely offsetting declines in energy costs. On an annualized basis, however, costs climbed 6% through May.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>The May figures do not reflect the <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.manufacturingdive.com\/news\/trump-increase-steel-tariff-nippon-us-steel-pennsylvania\/749451\/\" target=\"_blank\"><span><span><span><span><span><span><span>latest round of steel and aluminum tariffs<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> that took effect June 4, signaling even more cost pressure ahead on certain materials, according to construction economists.\u00a0 <\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<h3>Dive Insight:<\/h3>\n<p><span><span><span><span><span><span>Contractors are facing renewed cost pressures as <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/may-2025-economic-roundup-construction\/750224\/\" target=\"_blank\"><span><span><span><span><span><span><span>prices for key materials<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> surge under the weight of President Donald Trump\u2019s tariffs. <\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Executives at a recent Skanska webinar said the new duties could <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/new-steel-aluminum-tariffs-push-construction-costs-higher\/749931\/\" target=\"_blank\"><span><span><span><span><span><span><span>add millions to project costs<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>That leaves contractors open to further cost spikes, said Simonson.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cThe acceleration in the year-over-year rate of increase is alarming, given that most of the tariffs announced so far were not in effect when these prices were collected,\u201d said Ken Simonson, chief economist at the Associated General Contractors of America, in a release shared with Construction Dive. \u201cIt is likely that contractors will be hit with substantial additional price increases shortly, unless the tariffs are postponed or rolled back.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>The pressure stems from products containing steel, which rose sharply even before the most recent round of tariffs. AGC officials noted domestic producers have already responded with new price increases, and warned that upcoming tariffs scheduled for July could further disrupt <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/backlog-slips-2-year-high-tariff-delays\/750530\/\" target=\"_blank\"><span><span><span><span><span><span><span>supply chains and inflate costs<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><img decoding=\"async\" alt=\"-\" src=\"https:\/\/www.abc.org\/Portals\/1\/CEU\/PPI_Table_6.12.25.jpg?ver=rdSqmq4mAEvyV7yh1RMTDA%3d%3d\"><\/p>\n<p><span><span><span><span><span><span>\u201cMuch of this growth was driven by rising costs for steel mill products and aluminum mill shapes, concrete pipe and fabricated structural metal,\u201d said Macrina Wilkins, senior research analyst at AGC. \u201cContractors remain concerned that recently announced and upcoming tariff increases will drive material costs even higher, potentially leading to supply chain disruptions and higher overall project costs.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Despite rising prices, many contractors still see <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/warehouse-hotel-construction-commercial-planning\/750373\/\" target=\"_blank\"><span><span><span><span><span><span><span>positive trends<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> in the months ahead, said Anirban Basu, ABC chief economist. For example, Basu said due to a \u201ccooler-than-expected\u201d inflation reading in May, the chances of an interest rate cut by the Federal Reserve in 2025 have improved. That would provide construction activity with a boost, he said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>But while expectations around profit margins and rate cuts may boost investor confidence, construction activity will likely remain sensitive in the near term to tariff decisions, said Michael O\u2019Reilly, vice president at Rider Levett Bucknall, a New York City-based construction consultancy firm. Rate cuts would take some time to affect activity levels, and overall uncertainty still dominates the building landscape, he said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cThere is still a lot to shake out in terms of the implementation and effect of tariffs, and other policy changes,\u201d said O\u2019Reilly. \u201cOur view is that continued investment into construction will remain cautious, for now.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/construction-costs-jump-tariff-iron-steel-aluminum\/750735\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Listen to the article 4 min This audio is auto-generated. Please let us know if you have feedback. Dive &#8230; <a title=\"Construction costs jump at a 6% annualized rate\" class=\"read-more\" href=\"https:\/\/essential.construction\/news\/construction-costs-jump-at-a-6-annualized-rate\/\" aria-label=\"Read more about Construction costs jump at a 6% annualized rate\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[],"class_list":["post-30941","post","type-post","status-publish","format-standard","hentry","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/30941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=30941"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/30941\/revisions"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=30941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=30941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=30941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}