The short version
- — Construction prices rose 11.2% annually by September.
- — Higher fuel costs and material tariffs were the main drivers.
- — Shops must adjust pricing to maintain profit margins.
What happened
Construction prices increased by 11.2% over the last year through September, as reported by Construction Dive. This rise was primarily driven by higher fuel expenses and the effects of tariffs on certain crucial materials.
Why it matters to your shop
This notable increase in construction costs directly affects your operating expenses. When fuel prices climb, the cost of transporting materials to your job site and moving your crew and equipment between locations also goes up. Similarly, tariffs on materials mean that the raw goods you purchase are more expensive from the start, impacting your total project outlays before any labor is even factored in.
For independent shop owners, this situation demands careful attention to how you price your work. Not only do you need to account for your labor and overhead, but you also must accurately project material and transportation costs. Failing to factor in these rising expenses can erode your profit margins on current and upcoming projects, potentially leaving your business underfunded for its next job.
What a CAA member does about it
A CAA member approaches rising costs with proactive planning and transparent communication. This means meticulously detailing all material and fuel surcharges in project estimates and scopes of work, ensuring clients understand the current market conditions. It also involves establishing clear change order procedures to address any unexpected price increases during a project, documenting all communications and cost adjustments. An owner who operates with this level of diligence and honesty in their pricing reflects the professionalism recognized by joining the Craftsmen Association of America.
This brief is prepared for CAA members to help you run a smarter, stronger trade business. Dates and figures reflect the information available at time of publication.