Tariffs, Steel and Strategy: How the Best in Commercial Construction Are Adapting.
At Jackson Global, we speak with commercial construction leaders daily. With firsthand insights into the challenges and strategies shaping the industry, we’ve gathered how top professionals are tackling rising material costs due to tariffs, and how you can stay ahead.
Smarter Bidding: A Growing Trend Among Contractors
In response to rising material costs, more contractors are moving away from fixed-price bids. Instead, they are incorporating more flexible pricing structures that allow for changes in costs over the course of a project.
These strategies include:
Escalation clauses, which allow for price increases on steel and aluminum based on market conditions.
Milestone pricing, which helps distribute cost risk throughout the project.
Early procurement, enabling contractors to lock in prices before increases hit.
These changes provide more transparency and protection for both contractors and clients, helping ensure that projects remain on budget despite market fluctuations.
If you’re involved in estimating or project management, flexibility in pricing and procurement is becoming a key skill. Understanding how to structure bids that protect against material cost increases can make a big difference in project outcomes.
Domestic Sourcing: Not Always the Easy Fix
While many are turning to domestic sourcing in response to tariffs, it’s not always the simple solution it might seem. Challenges include:
Longer lead times due to backlogs at domestic mills.
Quality inconsistencies with certain materials.
Regional supply constraints, which can create delays in certain parts of the country.
Some contractors are finding success with a hybrid sourcing model, where they blend domestic and imported materials based on cost, availability, and delivery schedules.
If you’re working on a project with long lead times, being proactive in material procurement and understanding where delays might occur will help you stay ahead. For project managers and estimators, anticipating these issues early is essential for keeping projects on track.
Estimators Are Getting Involved Earlier
The role of estimators is evolving. In many cases, they’re stepping into pre-construction conversations earlier to help shape project scopes and identify potential issues before they become expensive problems.
For example, estimators might:
Flag materials with long lead times before a bid is finalized.
Suggest more readily available alternatives to avoid delays.
Work closely with architects to ensure designs are practical in terms of cost and supply availability.
By engaging earlier, estimators help mitigate risks and ensure smoother project execution, which ultimately saves time and money for clients.
If you’re in estimating, project management, or design, getting involved early to address material availability and cost concerns will set you apart. The more proactive you are, the more value you can bring to the table.
Beyond Tariffs: New Forces Shaping the Industry
Tariffs are just one part of the puzzle. Contractors and clients alike need to be aware of other trends that are reshaping the landscape:
“Buy America” provisions in public projects, which require the use of domestic materials.
Sustainability incentives driving contractors to adopt more environmentally friendly materials, including green steel and aluminum.
Global policy changes, such as carbon-border taxes in Europe, which could impact U.S. imports in the future.
For professionals working in public sector or green building projects, staying up to date on these regulations is critical to understanding bidding requirements and maintaining compliance.
Keep an eye on shifting regulations, especially if you're involved in public or sustainable construction. Being informed and prepared for these changes can give you an edge when bidding for projects or managing work in these sectors.
Embracing Strategy and Flexibility
Yes, tariffs are driving up costs, and yes, the supply chain remains unpredictable. But for contractors, estimators, and project managers who are adapting with strategic foresight, these challenges present an opportunity to out-strategize the competition.
The professionals and firms that will thrive in the years ahead will be those who take a flexible approach to bidding and procurement, understanding that material costs can fluctuate and timelines may shift. They will also need to recognize the broader forces influencing materials and supply chains, adapting their strategies accordingly. Engaging early in the project lifecycle will become increasingly important, allowing teams to help clients plan for success from the outset. Additionally, building teams that are adaptable to new trends and challenges will be a key factor in staying competitive.
In the end, it’s not just about surviving these changes—it’s about positioning yourself and your team to thrive in an ever-shifting market.
