C&W Report Indicates Construction Cost Pressure for Materials as Metal Prices Rise
U.S. construction cost pressures are shifting from labor to materials, with construction-related commodity prices rising 13.3% year-over-year (YOY) as tariffs, metals supply constraints and demand from data centers and infrastructure projects push input costs higher, according to Cushman & Wakefield’s latest Construction Insights for Global Occupiers report.
The increase in commodity prices is more than 4.7 times the rate recorded a year earlier, led by aluminum at 40.9%, copper base scrap at 39.3% and nonferrous metals at 38.5%. At the same time, labor cost growth has moderated, creating a markedly different construction inflation environment from recent years.
“The pressure on construction costs hasn’t disappeared, but its source is changing,” said Tyler Paytas, Global Head of Programs & Projects, Global Occupier Services at Cushman & Wakefield. “Labor remains constrained, particularly in specialized trades, but materials and equipment are increasingly driving escalation. For occupiers planning projects, that means the cost environment can remain challenging even as wage growth moderates.”
The ENR Building Cost Index increased 4.7% YOY in August, compared with a 1.5% increase in its skilled labor component. Overall construction materials rose at least 1.0% month over month for three consecutive months through August, will growth accelerating from 6.5% in June to 8.5% in August.