U.S. construction costs inflated by tariffs, but initial shock is moderating

One year after the initiation of President Donald Trump’s tariffs on imported materials, data shows a notable impact on construction costs, according to analysis by Cushman & Wakefield.

Although the initial tariff shock is moderating, ongoing cost pass-through is contributing to a structurally higher-cost environment.

Construction materials costs are expected to be up about 6% versus a pre-tariff baseline, with total project costs rising about 3%.

This is down from peak estimates thanks to modestly lower tariff rates and import diversification.

Construction materials imports have declined and diversified, reducing volatility but not eliminating cost pressures.

Development remains constrained. “Office and industrial pipelines are still below historical levels, partially reflecting continued underwriting discipline in an uncertain cost environment,” the report says.