Recent data reveals a significant uptick in construction material prices, presenting challenges for the industry. In March alone, overall construction input costs rose by 0.5%, with nonresidential inputs climbing even higher at 0.6%. These increases reflect a troubling trend that has persisted for three consecutive months, according to an analysis by Associated Builders and Contractors based on U.S. Bureau of Labor Statistics figures. The escalation is largely attributed to rising natural gas, steel, copper, and lumber prices, which have surged since February 2020.

Industry experts are expressing concerns about the broader implications of these price hikes. Anirban Basu, ABC's chief economist, noted that the impact of tariffs is becoming increasingly evident, contributing to the rapid price fluctuations. As owners and builders prepare for the second quarter, they face mounting pressure due to tariff-related uncertainties. Ken Simonson, AGC’s chief economist, highlighted how suppliers issued numerous price increase notices even before new tariffs took effect, complicating planning efforts for both public and private projects. Furthermore, contractors are grappling with volatile lumber and metal prices, as well as a flood of correspondence detailing additional cost adjustments.

The construction sector must adapt swiftly to mitigate risks associated with escalating costs. Michael O’Reilly from Rider Levett Bucknall emphasized the importance of early procurement strategies to secure favorable pricing. He advised clients to incorporate separate contingency plans depending on project stages and risk exposure. Jeffrey Shoaf, CEO of AGC, called for reconsideration of recent tariffs to allow greater market stability. Despite current workload levels, prolonged uncertainty could lead to project delays or cancellations if input costs continue to rise unchecked. The industry's resilience and proactive approach will be key in navigating this challenging period, fostering innovation and efficiency while ensuring value delivery to clients.