Ambiguities Challenge Project Owners Even As Construction Market Seems Set to Boom

REDWOOD CITY, Calif., March 4, 2025 – The robust construction market faces new pressures for customers to address from a variety of fronts affecting costs, labor and supply chains as the year progresses, according to DPR Construction’s latest Market Conditions Report.

“Markets don’t like uncertainty and, right now, we have a lot of it,” said Tim Jed, DPR Construction’s supply chain leader. “In addition to ‘normal’ disruptions like natural disasters, labor shortages and high demand for materials, the industry is dealing with ambiguities around domestic and foreign policies, global instability and cost unknowns. It is no time for business as usual in construction project planning.”

Project owners should take action with project partners to plan for potential effects from:

• New Executive Orders: Recent executive orders could create new opportunities and challenges. If intended efforts to streamline permitting processes come to fruition, it could mean a boon for customers focused on speed-to-market. Less certain is whether the supply chain – much of which relies on imports – can keep up, putting a pressure on owners to lock in materials pricing as early as possible. The availability of the skilled labor workforce is a similar challenge.

• Tariff Implications: Potential new tariffs on steel, aluminum, and other goods could have mixed effects. DPR notes the impact of past tariffs has been largely negative, with higher consumer prices and slower manufacturing employment growth. The report also cautions that tariff percentages do not directly translate to likely increases in material prices. For example, a 25% tariff on Mexican gypsum could yield a 5% increase in drywall prices. Even a modest price increase could have significant price impacts when scaled across projects.

• Supply Chain Concerns and Volatility: Global instability and geopolitical issues, like the ongoing war in Ukraine and tensions around Taiwan, are affecting the supply chain. This could lead to continued material shortages, price increases, and disruptions, which will be key for customers involved in industries relying on raw materials.

To learn more about key market trends to look for in 2025 and see how top indices are trending, explore DPR’s interactive market conditions dashboard.

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