Expect tariffs and labor to continue driving costs in 2019
A new report shows U.S. construction is on the rise with increasing costs
A new report from Mace, an international consultancy and construction firm, illustrates growth in the North American construction market from the residential sector is set to continue in 2019. But with that growth, increasing costs driven by steel tariffs and labor will follow.
The report reads: "Since the last election, investment to an aged infrastructure system has been a hot topic, with airports, roadways and bridges in need of a major overhaul. A draft investment plan issued by the current administration in February lost momentum; however, now the mid-terms have concluded there will likely be a renewed focus leading into the next Presidential Election in 2020.
"Tariffs introduced on steel and aluminium combined with a shortage of available skilled labor will have a significant impact on construction pricing as the sector moves forward in 2019."
After the initial shock of rising material costs, the market has mostly stabilize due to the contractor's ability to pass along rising costs to the client. However, with no slow down in sight and prices expected to keep rising, the sector may reach a tipping point where high prices begin to impact investor confidence, potentially affecting approvals of major new construction projects, the report reads.