2025 Industrial Construction Cost Guide

Commodities Pricing Commodity prices have recently experienced upward pressure due to macroeconomic headwinds. Prices began rising as early as January 2025, following announcements of potential tariffs, well before U.S. tariff policies were enacted. In March 2025, a 25% tariff on steel and aluminum imports took effect. Additionally, duties on Canadian softwood lumber are expected to increase to 35%. 1 As of March 2025, prices for major commodity groups have increased on a month-over-month (MOM) basis. On a YOY basis, commodity price changes vary. • Steel: Prices are down 7.9% YOY and still 29% below peak 2022 prices. While prices are expected to increase 6.1% by year-end, they are not expected to reach 2022 levels this year. • Lumber: Prices are up 2.5% YOY but down 17% from peak 2022 prices. By year-end, prices are expected to increase by another 2.3%. • Concrete: Prices have steadily increased over the past 10 years, up 7% YOY and expected to increase another 2.2% by year-end. • Copper: Prices have surged 7.8% YOY and are expected to increase another 7.8% by year-end.

HIGH-COST ENVIRONMENT PERSISTS

Pandemic-driven inflation and strong demand for construction across most property sectors pushed commodity prices higher, a trend that continues today. While steel prices are below their 2022 highs, they remain 31% above pre-pandemic levels, with additional tariffs expected to drive further increases. Copper has been in high demand due to electrification efforts across industries, resulting in prices that are 71% higher than pre-pandemic levels. Demand for copper will remain robust, and prices will continue to increase in the near term. Overall, the construction sector should expect continued increases in commodity prices.

Commodity Price Increases Accelerating Cost index for concrete, lumber, steel and copper

800

700

600

500

400

300

200

100

0

Jul-17

Jul-21

Jul-15

Jul-18

Jul-19

Jul-16

Jul-14

Jul-22

Jul-23

Jul-25

Jul-24

Jan-17

Jan-21 Concrete

Jan-14

Jan-15

Jan-16

Jan-18

Jan-19

Jul-20

Jan-22

Jan-23

Jan-25

Jan-24

Jan-20

Forecast

Lumber

Steel

Skilled Labor

Source: U.S. Bureau of Labor Statistics (BLS); Moody’s Analytics Forecasted

1 https://www.bloomberg.com/news/articles/2025-04-07/us-hits-canada-lumber-with-34-duties-even-before-trump tariffs?srnd=homepage-americas

2025 Industrial Construction Cost Guide 7