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2 days ago
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Construction costs rise as tariff clock ticks
This story was originally published on Construction Dive. To receive daily news and insights, subscribe to our free daily Construction Dive newsletter. Dive Brief: Construction input prices ticked up 0.2% in June, driven by increases in key materials such as copper and fabricated structural metal products, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics' Producer Price Index data. Input costs now sit 2.1% higher overall and 2.5% higher for nonresidential construction compared to a year ago, according to the report. Through the first half of 2025, nonresidential prices climbed at a 6% annualized rate. The June data predates the steepest tariffs set to take effect Aug. 1, leaving contractors bracing for more volatility as additional duties loom. Dive Insight: Contractors absorbed another round of steady cost increases in June, even before the most aggressive tariffs take hold later this summer, according to the Associated General Contractors of America. Aluminum mill shapes climbed 6.3% over the past year, steel mill products rose 5.1% and lumber and wood products increased 4.8%, according to the report. More extreme increases hit certain structural steel components, including a 22.5% spike in fabricated metal for bridges and 8.3% for bar joists and rebar. 'The fact that construction materials prices are rising even before the steepest proposed tariffs have taken effect doesn't bode well for what will happen in August if the promised new tariffs are implemented,' said Ken Simonson, AGC chief economist. 'Rising construction costs and economic uncertainty are already causing some owners to put projects on hold, which will only get worse if costs jump again.' The Trump administration raised steel and aluminum tariffs to 50% last month and plans to impose a similar 50% duty on copper on Aug. 1. Broader import restrictions also still remain under consideration. At the same time, inflation appears once again to be gaining momentum. Core good prices, excluding automobiles, increased at their fastest pace since late 2021 in the June Consumer Price Index report, signaling additional risk for contractors on the horizon, said Anirban Basu, ABC chief economist. 'Nonresidential input price escalation has accelerated in 2025," said Basu. 'While it is unclear how and when trade policy will affect construction materials prices, the impact was evident in June's CPI release.' Nevertheless, Basu said many contractors remain upbeat about their margins. That outlook may reflect federal tax changes under the One Big Beautiful Bill Act, which made 100% bonus depreciation permanent and helped offset some pressure from rising input costs. 'Economic uncertainty remains extraordinarily elevated,' said Basu. 'What is all but certain is that the Federal Reserve will not be cutting interest rates at its July meeting. Despite higher-for-longer interest rates and rising input prices, contractors remain relatively optimistic.' Still, AGC officials warn confidence may erode if tariff-driven increases persist. If costs spike too sharply, more developers may choose to delay or cancel projects outright, according to the report. 'The construction industry is poised to benefit from greater tax certainty as well as the administration's efforts to streamline permitting and reduce needless regulatory burdens,' said AGC CEO Jeffrey Shoaf in the release. 'Finding a way to provide greater certainty on materials prices is the best way to make sure the new tax and regulatory approach have the best possible impact on economic activity.' Recommended Reading Construction costs jump at a 6% annualized rate
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4 days ago
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Builders say One Big Beautiful Bill Act will fuel construction activity
This story was originally published on Construction Dive. To receive daily news and insights, subscribe to our free daily Construction Dive newsletter. The One Big Beautiful Bill Act is opening the door for increased construction investment, but it may also deepen existing challenges tied to labor and supply. Unlike the Inflation Reduction Act, which concentrated its support on clean energy, the One Big Beautiful Bill Act casts a wider net, said Vance Walter, senior director of legislative affairs at Associated Builders and Contractors. Its most transformative provisions include the restoration of 100% bonus depreciation, immediate expense of research and development costs and a permanent extension of the 20% pass-through deduction under Section 199A, said Deniz Mustafa, senior director of infrastructure finance at Associated General Contractors of America. These serve as boons for construction activity, according to industry sources. 'This also improves cash flow and makes it easier for contractors to replace aging equipment,' said Mustafa. 'In the construction industry, this means it is easier for companies to access equipment that is safer, cleaner and more efficient.' The changes are particularly significant for small and mid-sized contractors, where cash flow and tax predictability influence everything from equipment purchasing to hiring. 'Businesses can now immediately expense capital investments through 100% bonus depreciation,' said Walter. 'This will encourage firms to invest in new construction equipment and technologies, boosting safety, quality, productivity and economic growth.' Winning sectors The biggest potential winner may be manufacturing construction, said John Robbins, global head of enterprise project management at Turner & Townsend, the U.K.-based real estate and infrastructure consultancy. Expect more construction activity on automotive, food production and semiconductors, all of which now qualify for the 100% deduction, he said. 'I believe this will stimulate activity and investment with construction of new high-tech manufacturing. These tax enhancements should be very attractive and help greenlight shovels in the ground throughout the country,' said Robbins. 'Any newly built non-residential facility whose primary use is to manufacture, process or refine tangible goods can take the 100% deduction.' The provision covers a wide swath of domestic production, so long as projects break ground between January 2025 and December 2028, and are placed in service by 2031, said Robbins. This means projects that have been in a holding pattern or on the design boards — the Project Stress Index increased 11.4% in May — can 'now be accelerated,' according to Robbins. Beyond factory construction Other sectors likely to benefit include defense-related construction, air traffic control improvements and traditional energy production, said Jeff Urbanchuk, senior vice president at the American Council of Engineering Companies. The bill also sets aside nearly $50 billion for border security construction, he added. That funding could lead to new contracts across the southern U.S., potentially driving demand for firms with experience in civil and federal work. Projects tied to air traffic control and defense infrastructure may also open the door for specialty contractors and design firms, especially those with experience navigating federal contracts and military specs. Robbins added electric production, including zero-emission nuclear power, could also see renewed construction activity due to the broader capital-friendly structure of the bill. That may prompt developers to advance previously delayed or underfunded power generation work, said Urbanchuck. 'America's engineering firms are engaged across the domestic energy sector, designing systems that produce and transmit power generated from traditional, nuclear and renewable sources,' said Urbanchuck. 'We do believe the Big Beautiful Bill will lead to meaningful growth.' A rush to build But as more construction companies benefit from greater activity, pressure could build on labor and material pipelines already under strain, said Joseph Molloy, tax partner at Anchin, a New York City-based accounting, tax and advisory firm. 'The bill's emphasis on domestic sourcing and reshoring may increase demand for U.S.-based construction labor and materials,' said Molloy. '[That's] potentially intensifying workforce and supply chain pressures.' That strain may only increase as firms rush to break ground before other provisions phase out, said Robbins. For example, tax credits for energy-efficient buildings are set to expire after 2026, creating urgency for stalled or newly planned green developments. 'Timing and financing strategy now matter as much as project cost in maximizing the new law's benefits,' said Robbins. Enhanced incentives for projects in opportunity zones could also drive more construction in distressed communities, particularly in residential and mixed-use segments, he added. Yet, even with these provisions in play, long-term momentum still hinges on what comes next, said Urbanchuk. 'Overall, the Big Beautiful Bill is a step forward for our industry,' said Urbanchuk. 'Our attention now goes to what Congress is planning for the reauthorization of the Infrastructure Investment and Jobs Act, which is set to expire in September 2026.' Recommended Reading Tariffs keep contractors guessing on material costs
Yahoo
04-06-2025
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Construction Skills Crisis Drives New AWP Certification Launch
Despite record employment, the U.S. construction industry faces a severe skilled labor shortage, driving up costs and delays. Advanced Work Packaging (AWP) improves productivity and safety, but adoption is slowed by a lack of expertise. Concord Academy, founded by AWP expert Olfa Hamdi, offers self-paced online certification to equip professionals with the skills to deliver projects more efficiently and cost-effectively. WASHINGTON, June 4, 2025 /PRNewswire-PRWeb/ -- Despite record construction employment—over 8.3 million workers in early 2025—the U.S. industry still needs an estimated 439,000 more skilled workers by year-end to meet rising demand (1). Up to 90% of contractors struggle to find qualified personnel, particularly in skilled trades, causing higher costs, delays, and sometimes cancellations, Associated Builders and Contractors (ABC) reports. (2). To compensate for this reality, contractors and project teams are adopting Advanced Work Packaging (AWP) to boost productivity and safety, but its adoption is limited by a persistent skills gap—lack of expertise, fragmented knowledge, and resistance to change. As Olfa Hamdi, Co-founder & CEO of Concord Construction Academy, notes: "Professional training is the missing link—it's what turns AWP from a concept into a practical, transformative method that organizations can truly own." The Challenge: AWP Adoption Is Growing, But Expertise Is Lagging Despite increased interest and gradual adoption of Advanced Work Packaging (AWP), the construction industry continues to face substantial challenges in scaling its benefits. Multiple industry surveys reveal that most construction professionals lack formal training in AWP and field planning, which acts as a major bottleneck for widespread implementation. In the absence of standardized training and certification programs, companies often resort to informal knowledge sharing and experimental approaches, slowing down adoption and undermining the full potential for productivity, safety, cost and schedule savings. A systematic review published in MDPI (3) and a comprehensive report by the Associated General Contractors of America (AGC) highlight persistent barriers such as organizational resistance to change, inadequate training resources, and misalignment of processes throughout project lifecycles. The lack of a universally accepted industry standard for work packaging further exacerbates these issues, as noted in benchmarking studies. Collectively, these challenges contribute to a persistent skills gap, limiting the consistent and effective use of AWP and, ultimately, its broader impact on the construction sector. AWP: 5 Benefits That Improve Results AWP is more than just a planning tool—it represents a holistic shift in capital project delivery. By systematically breaking down projects into manageable work areas and packages and aligning engineering, procurement, and construction sequences, AWP dramatically improves project predictability, safety, and efficiency: Increased Productivity: Industry data consistently shows that projects using AWP experience a 25% increase in productivity, driven by better upfront planning and more effective supervision. Cost and Schedule Predictability: AWP improves predictability in both cost and schedule, with documented reductions in total installed costs by up to 10% and improved on-time delivery. Enhanced Safety: AWP increases safety awareness and performance, reducing exposure to unplanned work and rework, and lowering the likelihood of near misses and unsafe behavior. Reduced Field Rework: Implementation of AWP leads to a 20% reduction in field rework by improving communication and alignment between engineering and construction teams. Improved Constructability: Early engagement of construction teams in the planning process fosters better constructability input, resulting in cost-saving measures and accelerated schedules. Concord Academy: Filling the Gap with Scalable, Role-Specific Training Recognizing the critical need for standardized AWP training, Olfa Hamdi—a pioneering researcher, author of the AWP Lifecycle Implementation Standard and co-inventor of the AWP methodology through the Construction Industry Institute's RT-272 research team—founded Concord Academy. The academy offers standardized, role-specific AWP courses online and on-demand, aligning with the AWP Standard and global best practices. The curriculum is designed to bridge the gap between theory and practice, empowering project teams at all levels, from early definition to field execution. to implement AWP with confidence and consistency. Certified Teams Deliver Better Results Organizations that invest in AWP certification through Concord Academy consistently achieve transformative outcomes. By equipping their teams with standardized, role-specific AWP knowledge, companies report productivity improvements of up to 35%—exceeding the industry average—along with reductions in total project costs by as much as 10% and measurable enhancements in safety performance. Additionally, organizations report substantial decreases in field rework and late changes as well as improved alignment among all project stakeholders, from engineering and procurement to construction and commissioning teams. Concord Academy's approach is designed to help organizations embed AWP as a core project strategy, building lasting internal capability and empowering teams to sustain improvements across multiple projects. The result is a culture of risk mitigation, constraint management and continuous improvement, where best practices become standard operating procedures and project risks are proactively managed. Global Reach and Industry Impact Concord Academy's AWP training has a truly global footprint, with adoption in more than 30 countries across the energy, petrochemical, infrastructure, mining, hydrogen construction and industrial sectors. This widespread use is driving faster, safer, and more predictable capital project delivery worldwide, as organizations of all sizes leverage AWP to overcome common challenges such as labor shortages, cost overruns, and schedule delays. Concord Academy's international reach underscores its commitment to advancing the construction industry as a whole, promoting the adoption of best practices and fostering innovation across borders. "When organizations invest in AWP training and make it a core part of their culture, they don't just improve project outcomes—they set a new standard for excellence across the entire construction sector.", explains Olfa Hamdi. As the construction industry continues to grapple with persistent labor shortages and rising project complexity, the importance of AWP as a best practice for project delivery and predictable execution is more critical than ever. By standardizing training and embedding AWP into organizational DNA, Concord Academy is helping the global construction sector build resilience, efficiency, and long-term success in an increasingly competitive environment. About Olfa Hamdi Olfa Hamdi is an internationally recognized expert in capital project management, construction excellence, large scale institutional reform and dispute resolution. She holds advanced degrees from the University of Texas at Austin, Ecole Centrale de Lille and Texas Law School, and is an engineer, entrepreneur and auditor. Hamdi is the founder of the Advanced Work Packaging Institute and the co-founder and CEO of Concord Project Technologies Inc., which develops innovative project management solutions for global capital projects. She is credited as a co-inventor of the Advanced Work Packaging (AWP) methodology, which has become a global industry standard for improving project predictability, safety, and efficiency. Concord Academy, led by Olfa Hamdi, provides online, role-specific training and certification in Advanced Work Packaging and Workface Planning. The academy's programs equip professionals with the knowledge and skills needed to implement AWP effectively, driving productivity and cost savings for organizations worldwide. Concord Academy's training is widely adopted across the energy, infrastructure, and industrial sectors, helping companies overcome labor shortages and project execution challenges. Visit her at References U.S. BUREAU OF LABOR STATISTICS. "Industries at a Glance: Construction: NAICS 23." 29 Oct. 2015, "Associated Builders and Contractor News Releases." May 19, 2025 -Media/News-Releases/abc-the-construction-industry-needs-501-000-additional-workers-in-2024. Slim Rebai, et al. "Barriers to Adopting Advanced Work Packaging (AWP) in Construction." Buildings, vol. 14, no. 4, 8 Apr. 2024, pp. 1032–1032, Media Inquiries: Karla Jo Helms JOTO PR™ 727-777-4629 Media ContactKarla Jo Helms, JOTO PR™, 727-777-4629, khelms@ View original content to download multimedia: SOURCE Concord Academy Sign in to access your portfolio
Yahoo
14-05-2025
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Backlog hits nearly 2-year high despite tariff worries
This story was originally published on Construction Dive. To receive daily news and insights, subscribe to our free daily Construction Dive newsletter. Despite the threat of tariffs, construction backlog rose to its highest level since September 2023 and contractors' confidence in their future profit margins grew, according to an Associated Builders and Contractors survey April 22 to May 6. Backlog has increased significantly over the past year for contractors with greater than $100 million in annual revenues, according to ABC. Though backlog has also risen modestly for the smallest contractors, it is down year-over-year for those with $30 million to $100 million in annual revenues. 'Nearly 22% of contractors had a project delayed or canceled in April due to tariffs, up from 18% in March, while 87% have been notified of tariff-related materials prices increases,' said Anirban Basu, ABC chief economist. The survey is a look into how contractors are viewing their businesses following President Donald Trump's tariff saga and the whiplash some builders have felt following the introduction of those policies. Basu said that despite these headwinds, contractors are keeping busy. Even so, there are signs that builders are bracing for the future. 'While ABC members remain upbeat about the near-term outlook, the share of respondents that expect their sales to decline over the next six months rose to 19% in April, up 6 percentage points since the start of the year,' Basu said. Although commercial and institutional construction saw a slight gain in backlog, both heavy industrial and infrastructure work dropped, a departure from the previous month's reading. In addition, profit margin expectations improved in April, as the readings for sales and staffing levels fell, though the outlook for sales is still higher than a year ago, according to ABC. The readings for all three components remained above the threshold of 50, indicating respondents expect growth over the next six months. Right now, data centers are dominating the overall construction planning market, according to the April iteration of the Dodge Momentum Index, but other segments remained subdued.
Yahoo
12-03-2025
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From soup cans to airplanes, steel and aluminum are a fundamental part of American life
Steel and aluminum are ubiquitous in Americans' lives. A stainless steel refrigerator holds aluminum soda cans. A stainless steel drum tumbles inside an aluminum washing machine. They're the metals used in cars and airplanes, phones and frying pans, skyscrapers and zippers. That's why President Donald Trump's 25% tariffs on all steel and aluminum imports — which went into effect Wednesday — could have widespread impact on manufacturers and consumers. Here are some of the industries and products that rely on aluminum and steel: See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. Construction The construction industry uses about one-third of all U.S. steel shipments, more than any other industry, according to the Council on Foreign Relations. The industry depends on a global supply chain to build everything from airports to schools to roads, according to Associated Builders and Contractors, a trade group with more than 23,000 members. The group says some contractors were able to lock in prices on steel or aluminum ahead of the tariffs. But if they are prolonged, the import taxes will ultimately raise prices at a time when the construction industry is already struggling with higher costs for labor and materials. And uncertainty around the tariffs will make it less likely that companies will commit to big building projects, the group said. Annie Mecias-Murphy is the co-owner and president of JA&M, a contractor for commercial buildings based in Pembroke Pines, Florida. Some of the main materials her company uses are rebar, or reinforced steel, and post-tension cables, which reinforce concrete after it's poured. 'In attempts to get ahead of the tariffs, we do try to lock in our prices and work with our trade partners and clients on different strategies,' Mecias-Murphy said. 'But ultimately, the rising costs make it difficult for small business owners like myself to contemplate large-scale multi-year projects.' Steel cans Tin mill steel is used for a wide variety of packaging, from soup cans to hairspray. And the U.S. currently imports 70% of its tin mill steel, according to the Can Manufacturers Institute. The institute said the more limited tariffs Trump imposed in 2018 resulted in the closure of nine tin mill lines in the U.S. as manufacturers shifted to other types of steel or simply shut down. As a result, only three U.S. tin steel lines remain open. Mick Beekhuizen, the president and CEO of The Campbell Co., said in an earnings call last week that his company imports tin mill steel from Canada. Beekhuizen said Campbell is working with its suppliers to mitigate the impact of tariffs, but it may need to raise prices. The Consumer Brands Association, which represents packaged food makers, said it's urging the Trump administration to exempt aluminum and steel products that aren't available in adequate quantities in the U.S. Otherwise, consumers will likely see higher grocery prices. 'We encourage the Trump administration to recognize the different needs of different U.S. manufacturing sectors,' said Tom Madrecki, vice president of supply chain resiliency at the Consumer Brands Association. Autos Most of Ford, GM and Stellantis' steel and aluminum already comes from the United States, reducing the direct impact the companies would feel from higher duties. But experts have warned that tariffs might mean the three Detroit automakers have to raise their prices. Domestic steel and aluminum producers will have to increase their capacity to meet demand or risk a short supply in the near term, making these products more expensive and driving up vehicle costs. Another automaker who could feel the pain from tariffs: Elon Musk's Tesla. During a January earnings call, Tesla's Chief Financial Officer Vaibhav Taneja noted the uncertainty around tariffs. 'The imposition of tariffs, which is very likely... will have an impact on our business and profitability,' Taneja said. This could be detrimental to an already inflation-sensitive American car buyer. The average transaction price for a new vehicle was just over $48,000 last month, according to Kelley Blue Book. And as with the steel and aluminum tariffs of Trump's first term, automakers are likely to have to revisit their financial outlooks for the year as they brace for impact. Appliances Makers and sellers of products ranging from microwaves to dishwashers are having to navigate cost increases. Some like Whirlpool, which produces 80% of what it sells in the U.S. domestically, appear to be more insulated from the tariffs. Whirlpool executives told analysts at an investor conference earlier this month that Whirlpool has locked in contracts for a minimum of one year for most of its raw materials, including steel. 'We are in a pretty good position as of right now,' said Roxanne Warner, a senior vice president and controller at Whirlpool. But Abt, a family-owned appliance and consumer electronics store in Glenview, Illinois, received notices this week from manufacturers that said they would raise the suggested retail price of countertop products like espresso makers and toasters anywhere from 10% to 15% starting April 1, according to Richie Palmero, the store's small appliance buyer. Abt sells coffee makers that range from $100 to $500, as well as espresso makers priced from $1,000 to $5,000. Palmero said that putting another $250 on the price of a $2,500 is a lot, but she said she doesn't think sales will suffer significantly. 'I think customers would still buy it because it's good quality,' she said. 'But they might think about it. They might take longer to buy it. It might not be an impulse buy. I don't think they're going to go down to Mr. Coffee or a $20 coffee maker.' During Trump's first term, tariffs were slapped in early 2018 on washing machines, and prices for the appliances spiked 12%, according to the American Economic Review, an academic journal. Clothes dryers became pricier as well, even though they weren't targeted. The median price of washing machines and dryers increased by about $86 and $92 per unit, respectively, according to the academic journal. Aluminum cans U.S. beverage companies use more than 100 billion aluminum cans each year, according to the Can Manufacturers Institute. Most of the thin rolled sheets of aluminum alloy that are used for cans are made in the U.S., but can makers do import a small percentage, the institute said. The Brewers Association, which represents 9,500 independent U.S. craft beer makers, estimates that 10% of U.S. cans are made from Canadian aluminum. Aluminum tariffs will force small brewers to pay more for cans, the association said, even as steel tariffs drive up the cost of equipment like kegs and fermentation tanks. But not all manufacturers are worried about aluminum tariffs. Molson Coors says it shifted production in recent years and now gets 'almost all' of its aluminum for U.S. consumption from U.S. sources. Coca-Cola Chairman and CEO James Quincey said during a recent earnings call that if aluminum cans get more expensive, Coke can shift to other materials like plastic bottles. Quincey told investors he didn't want to exaggerate the cost of aluminum tariffs. 'You should not conclude that this is some huge swing factor in the U.S. business,' he said. 'It's a cost. It will have to be managed. It would be better not to have it relative to the U.S. business, but we are going to manage our way through.' Aviation Airplanes have a mixture of metal parts, from aluminum frames, wings and door panels to steel landing gear and engine parts. Many are extremely specialized and sourced from overseas. The Aerospace Industries Association, which represents nearly 300 aerospace and defense companies, says tariffs put their industry — and national security — at risk. "We are concerned about additional downward pressure on an already stressed American supply chain," Dak Hardwick, the association's vice president of international affairs, said. "We are investigating mitigation strategies that would minimize the impacts of new tariffs on our industry, and we hope to work with the Trump Administration to highlight the critical role we play in America's economic prosperity, national defense and deterrence.' ___ AP Climate reporter Alexa St. John in Detroit contributed reporting.
