Skanska Building Operations’ Spring 2025 Construction Market Trends Report Delves Into Tariff Impacts on Industry Supply Chains

NEW YORK--(BUSINESS WIRE)--Skanska, a leading global construction and project development firm, has released its Spring 2025 Construction Market Trends Report. Featuring unique analysis with its Composite Construction Index, the report provides insight on the state of the industry, including the growing impact of tariffs on materials, costs and schedules.

Skanska’s work in a range of sectors across the country gives them a unique perspective into these trends and what’s to come in the near future:

• Construction costs remain volatile as tariffs on key materials – including 25% on imported steel and aluminum and 10% on goods from China – continue to pressure budgets across all project types.
• Global supply chain stability remains at risk, with over 40% of surveyed suppliers expecting moderate to severe disruptions in material availability and lead times over the next 12 months.
• The construction industry faces a persistent labor gap of between 250,000 and 500,000 skilled workers, with nearly 70% of contractors reporting difficulty filling critical roles.
• Projects in sectors reliant on steel, aluminum, and façade systems could see cost increases ranging from 5% to 15%.

“As the market continues to respond to evolving tariff policies, supply chain disruptions and labor shortages, it’s more important than ever to help our clients make informed decisions,” said Steve Stouthamer, Executive Vice President of Project Planning at Skanska USA Building. “Our team is committed to providing data-driven insights and leveraging our relationships with suppliers and fabricators to navigate these challenges, helping owners, builders and industry partners plan with greater confidence in uncertain times.”

Skanska will host a webinar on Tuesday, June 3: Tariff Ripple Effects: Aligning Owners, Builders and Suppliers Amid Tariff Uncertainty. Stouthamer will be joined by leaders in the steel industry with deep expertise in data center construction, as well as an innovative voice in the aluminum sector focused on cutting-edge façade systems. Together, they will explore the findings of this new report and share timely insights on how tariffs are reshaping the industry. Learn more and register here.

Additional takeaways highlighted in the Spring 2025 Construction Market Trends Report include:

• Construction and Labor
  • The construction unemployment rate edged down to 5.9% in Q1 2025, reflecting sustained demand for skilled labor despite ongoing workforce shortages.
  • Wage growth for key trades such as electrical, mechanical and steel fabrication has accelerated, with average increases of 4–6% year-over-year.
• Architecture Billings Index
  • The Architecture Billings Index (ABI) rebounded slightly to 46.7 in March 2025, showing signs of stabilization but still reflecting soft demand for new project starts.
• Commodities and Materials Pricing
  • Steel prices have risen by 12% since January 2025, driven by tariff pressure and renewed demand in the manufacturing and infrastructure sectors.
  • Aluminum prices have increased by 6.5% year-over-year, with suppliers citing cost pressures from tariffs and energy costs.
  • Copper prices remain elevated due to continued global supply constraints, up 9% year-over-year.
  • Fuel prices remain stable for now, but industry analysts are monitoring potential cost spikes tied to geopolitical tensions in energy-producing regions.
• Construction Cost Indices
  • The ENR Building Cost Index increased by 2.3% year-over-year, reflecting rising labor and material costs.
  • Skanska’s Composite Construction Cost Index shows a 3.1% year-over-year increase, highlighting rising mechanical, electrical and specialty trade costs not fully captured in traditional indices.
• Supply Chain Trends
  • Lead times for electrical gear, HVAC systems and specialized mechanical equipment remain elevated, ranging from 40 to 60 weeks for certain high-demand products.
  • Domestic suppliers report increased demand as owners and builders seek to mitigate global supply chain risks, putting additional strain on U.S.-based manufacturing capacity.

About Skanska USA

Skanska uses knowledge & foresight to shape the way people live, work and connect. More than 135 years in the making, we’re one of the world’s largest construction and project development companies. With operations in select markets throughout the Nordics, Europe and the United States, global revenue totaled $16.8 billion in 2024.

Skanska in the U.S. operates 28 offices across the country, with its headquarters in New York City. In 2024, the U.S. construction sector generated $8.2 billion in revenue, and the U.S. development sector’s net investments in commercial projects totaled $224 million. Together with our customers and the collective expertise of our 6,300 teammates in the U.S. and 26,300 globally, we create innovative and sustainable solutions that support healthy living beyond our lifetime.