If you're in the construction industry, you're already feeling the pressure: materials are going up, quotes are becoming less predictable, and timelines are getting harder to secure. The volatility in pricing isn’t just a trend—it’s a reflection of deeper shifts in the market that we need to pivot for ahead of time.

, there are two very different paths ahead.

“The major influencers that will be driving construction costs in 2025 have the potential to follow two paths,” says

, Vice President and Economic Strategist at Altus Group.

Path one suggests we may see stabilizing or even declining costs, largely due to anticipated softer construction volumes in 2025. Path two, however, introduces the tariffs wild card.

“The threat of tariffs could offset the baseline view of costs in 2025,” says Norman.

The looming threat of extended tariffs is applying upward pressure on material prices. It’s this uncertainty that’s making planning extremely difficult for everyone involved in the build cycle.

Here’s what we’re seeing right now on the ground with our trades and suppliers:

Victaulic: 4.75% increase in January, another 4.5% expected in June

One of the toughest parts of this environment is figuring out what’s

. Are these cost increases the result of legitimate supply chain pressures? Or are some suppliers using current uncertainty to push margins?

I’m hearing from distributors that we should

expect more increases through the coming months

—especially as tariff impacts become clearer.

Staying in close communication with suppliers and subcontractors

Reviewing material trends weekly across divisions

Advising clients on proactive procurement strategies where possible

#ConstructionTrends #MaterialCosts2025 #TariffWatch #AltusGroup #GeneralContracting #GCInsights #VirgiliGroup

Spring Forward; 2025 Construction Materials Price Update

Reasons Driving Up Building Costs During Winter Months

Winter construction brings challenges that can increase costs by around 20%. Below are the key factors that drive up expenses, along with some personal field experiences.

Cold weather can saturate or freeze soil, making it wet and heavy. This stresses machinery, complicates excavation, and increases hauling costs. Moreover, saturated soil is unsuitable for backfill and grading, often forcing contractors to import clean fill if available.

Maintaining proper temperatures on site is essential for curing materials such as concrete or adhesives and keeping workers safe. Heating workspaces, trailers, and temporary structures incurs expenses. Contractors may need to rely on alternative energy sources, such as propane or temporary electrical setups, to meet these requirements.

Snow and ice can quickly halt work by blocking access and adding to labor hours. Extra crews or specialized equipment are often necessary to remove snow from parking areas, walkways, and workspaces, ensuring the site remains accessible and safe.

Cold conditions slow down both equipment and worker productivity. Machines operate less efficiently, and workers move slower in heavier gear. For example, about eight years ago in Vaughan, while installing sign brackets on two commercial buildings during minus thirty-one degree weather, our tool batteries died faster, machinery had difficulty starting, and we had to retreat indoors every 20 minutes to thaw out. These circumstances certainly help build character, nevertheless the interruptions doubled the time needed to complete the work.

Reduced daylight limits the number of productive hours each day. When natural light is insufficient, crews must rely on artificial lighting, which increases energy costs and further reduces productivity.

Understanding factors such as saturated soil, heating requirements, snow management, slower work, and reduced daylight helps contractors better plan budgets during winter. By anticipating these challenges and learning from field experiences, construction professionals can adjust their strategies and invest in the right equipment to keep projects on track throughout the colder months.

Factors Driving Winter Construction Costs

Around this time of year, the construction industry often experiences a natural slowdown, leading to a sense of worry for many businesses. With more time spent on estimating and less on executing, this seasonal cycle has become a familiar rhythm over the years.

However, this period also presents an opportunity to reflect, recalibrate, and prepare for the busy months ahead.

Today, we’re excited to share some key strategies that our company implements to strengthen operations & set the stage for a productive and prosperous busy season.

- trim the fat, identify unnecessary costs

- streamline processes of quoting to project turnaround times

- create a list of specific clients to connect with

- reach out to past clients for maintenance work or small projects

- collaborate with suppliers, distributors or other contractors

- join groups within the industry to expand your network

- encourage certifications or additional courses

- cross-train employees for versatile roles

- renegotiate supplier contracts using last year’s purchases as leverage

Find opportunities in challenging times by focusing on operations, marketing, relationships, training, and finances.

Around this time of year, the construction industry often experiences a natural slowdown, leading to a sense of worry for many businesses.

When Fishermen Can’t Go to Sea, They Mend Their Nets

Navigating Economic Uncertainty: Identifying the Silver
Lining


The construction industry often faces economic unpredictability—whether it’s supply chain disruptions, rising material costs, or a slowdown in new projects. Rather than waiting for circumstances to improve, slower business periods present an opportunity to strengthen operations and prepare for busier times ahead. Here are practical strategies to stay resilient and ready for growth that we find valuable.


Slower periods are ideal for reviewing and refining workflows;
-Are there inefficiencies in daily operations?
-Can project management or team communication be improved?
-Are costs under control, or is there room for improvement?


Take time to streamline processes &amp; enhance operational efficiency.

2. Focus on Marketing & Customer Outreach


While it’s tempting to scale back marketing during slow periods, staying visible is critical.


Consider:
-Updating the company website & social media platforms to highlight completed projects.
-Sharing customer testimonials &amp; case studies
-Reconnecting with past clients


These efforts keep the business top-of-mind when clients are ready to begin new projects.


-Strengthen connections & expand networks
-Checking in with past clients to offer maintenance services or smaller projects.
-Collaborating with contractors or suppliers on potential partnerships.
-Engaging with local trade groups or business organizations to explore referral opportunities.


Stronger relationships breed future business opportunities.


Enhance the team’s skills and readiness:


-Provide training in new construction techniques or updated safety protocols
-Encourage certifications that add value to services offered
-Cross-train employees to handle multiple roles when needed


A well-trained team can adapt quickly when demand rises.

Economic uncertainty calls for a more creative approach to financial management:
-Review previous spending and identify areas to reduce costs
-Explore opportunities to renegotiate supplier contracts
-Build or reinforce an emergency fund to prepare for unexpected challenges


Strong financial planning ensures the business remains stable during downturns.


Slower seasons offer valuable opportunities to strengthen a business. By focusing on operations, marketing, relationships, team development & financial planning, a construction business can emerge more resilient and prepared for growth when demand returns. Identify the silver lining.

Rather than waiting for circumstances to improve, slower business periods present an opportunity to strengthen operations and prepare for busier times ahead.

Navigating Economic Uncertainty: Identifying the Silver Lining

In an industry where margins are tight and materials account for a significant portion of costs, tariffs on imported goods can have profound effects on small to medium construction businesses. This week, we examine the key areas where tariffs are likely to have the greatest impact, with a specific focus on Ontario’s construction industry.

One of the most immediate and tangible effects of tariffs is the rising cost of essential construction materials. Steel, aluminum, lumber have historically been subject to tariffs. Remember, in 2018, U.S. tariffs on Canadian steel and aluminum caused prices to spike by as much as 25%, forcing local contractors to set quotes that were valid for as little as three days. According to Canada Home Builder's Association, " Canada imports some $3.5B in glass and glass products, $3.1B in major appliances, $2.2B in hardware, about $1B in ceramic tile and products".

Tariffs create uncertainty in the global supply chain, leading to delays in material availability and fluctuating costs. Ontario’s construction industry, which relies heavily on imports, has faced supply bottlenecks due to trade disputes. The ongoing global steel shortages, emphasized by tariffs, have impacted lead times for essential building materials. For smaller construction firms that rely on just-in-time inventory, these disruptions can impact cash flow and strain relationships with clients.

With fluctuating material costs, accurately pricing contracts becomes increasingly difficult. Fixed-price contracts, in particular, can become much riskier. In this economic environment, projects often operate on strict budgets, small to medium construction businesses must consider escalation clauses, or negotiate with suppliers to mitigate financial risks.

While the impact of tariffs is significant, there are strategies that small construction businesses can employ to mitigate these challenges:

Explore alternative suppliers or source domestically when feasible

Negotiate cost-sharing agreements with clients

Organizations such as the Toronto Construction Association (TCA) and OGCA provide resources to help businesses navigate the challenges posed by tariffs

Tariffs create undeniable hurdles for small construction businesses in Ontario, impacting material costs, supply chains, and pricing. However, with proactive planning, strategic procurement, and adaptive pricing strategies, businesses can navigate these obstacles while maintaining competitiveness in the market. As the industry continues to evolve, staying informed and agile will be key to long-term success.

Tariffs & Small Construction Businesses in Ontario

The residential construction sector is grappling with multifaceted challenges. An intricate web of supply chain disruptions has permeated the industry, resulting in prolonged project timelines, inflated budgets, and an atmosphere of unpredictability. Factors such as the aftermath of the COVID-19 pandemic, geopolitical trade barriers, and unforeseen climatic events have collectively contributed to this dilemma. With the demand for housing and urbanization on the rise, understanding and addressing these challenges becomes paramount.

Material Scarcity: Unpacking the Central Dilemma

At the epicenter of these complications is the noticeable scarcity of essential building materials. Whether it's the soaring prices of lumber and steel or the shortage of basic components, the disparity between demand and supply is glaring.

: Historically, lumber has been a staple in construction. However, unprecedented events such as devastating wildfires, trade disagreements between nations (like the US-Canada lumber dispute), and shutdowns due to pandemic responses have severely curtailed supply. The result? An exponential increase in lumber prices, with some reports indicating a rise of over 200% in certain periods.

: Metals like steel and copper are not faring any better. Complex international trade relationships, burgeoning global infrastructural projects, and transportation impediments are collectively responsible for their scarcity. In fact, the World Steel Association reported a significant surge in steel demand, predicting it to reach 1.7 billion tones in 2022.


Arguably, transportation inefficiencies have compounded the existing issues. The global shipping industry, already reeling under the pandemic's impact, has faced further setbacks with canal blockages, port congestions, and container shortages. These impediments have culminated in materials being stranded, magnifying delays and costs.

The construction industry's human resources aren't immune to these disruptions. Enhanced safety measures post-pandemic, combined with a noticeable shift in workforce demographics and migration patterns, have culminated in a dearth of skilled labor. As per the Bureau of Labor Statistics, the gap in construction employment has consistently widened, further stressing project timelines and inflating wages.

Strategizing for the Future: Potential Solutions

While these challenges seem insurmountable, innovative strategies and adaptability can pave the way for stabilization:

: By broadening supplier networks and seeking alternatives, companies can foster a more adaptable and resilient supply chain.

: Adopting cutting-edge technologies, such as AI-driven demand forecasting and blockchain for transparent procurement, can enhance operational efficiency.

: Embracing eco-friendly building techniques and materials not only aligns with global sustainability goals but can also reduce dependency on overstrained resources.


The present scenario in the residential construction domain underscores the urgency to innovate and adapt. By integrating technology, fostering collaborations, and reinventing methodologies, the industry can chart a course through this supply chain maze. The journey toward a stable and resilient supply ecosystem might be fraught with challenges, but with collective endeavor, it's one the industry can undoubtedly navigate.

Explore the intricate supply chain issues in residential construction, from material scarcity to labor shortages. This post unravels the crisis, examining current challenges and innovative strategies for a resilient future.

Unraveling the Knot: Deep-Dive into Supply Chain Complications in Residential Construction

Toronto, the heart of the Greater Toronto Area (GTA), has always been at the forefront of Canada's urban development. As one of North America's fastest-growing cities, it faces unique construction and urban planning challenges. One innovative solution that's making waves in the Toronto construction scene is green, or sustainable, construction. As the cityscape evolves, Toronto aims to be greener, more sustainable, and more environmentally conscious.

The Green Imperative: Why Toronto is Embracing Sustainable Construction

: The Toronto city council, recognizing the impacts of urbanization on the environment, is championing sustainable building practices. With rising concerns about carbon footprints, energy consumption, and waste, green construction is no longer just a trend—it's a necessity.

: Sustainable buildings often translate to lower energy and water costs. Toronto's Green Standard (TGS) offers tiered performance measures, with incentives like development charge refunds, encouraging builders to adopt eco-friendly practices.

: Dense metropolitan areas like Toronto are familiar with the urban heat island effect, where city regions experience higher temperatures due to human activities and extensive concrete structures. Green buildings, with features like green roofs, combat this effect, making the city more livable.

: Located on Toronto's waterfront, this building showcases sustainable design, incorporating features like rainwater harvesting and a green roof, setting an example for future Toronto constructions.

: Not only is this Toronto hospital designed with sustainability in mind, but it also promotes patient well-being. With abundant natural light, green terraces, and energy-efficient systems, it’s a testament to how green design can serve multiple purposes.

Even with numerous advantages, green construction in Toronto faces hurdles. High upfront costs, lack of awareness, and the need for specialized labor can be deterrents. However, as public awareness grows and more incentives are introduced by the GTA governmental bodies, these challenges are gradually being overcome.

With increasing urbanization, Toronto's commitment to green building practices is not just commendable but essential. The GTA is on track to becoming a global exemplar in marrying urban development with environmental responsibility.

Toronto, often seen as the jewel of the GTA, is paving the way for a future where cities and nature coexist harmoniously. As the city's skyline reaches new heights, its foundations are being rooted deeper in sustainable practices, promising a greener future for all its residents.

As one of North America's fastest-growing cities, it faces unique construction and urban planning challenges. One innovative solution that's making waves in the Toronto construction scene is green, or sustainable, construction.

Revolutionizing Toronto's Skyline: The Rise of Green Construction in the GTA

Taking a step back this week to reflect on some core principles I’ve made an effort to consistently execute throughout Q1—principles that serve me in both business and everyday life:

This concept is applicable in every situation. The wins and the setbacks—nothing is permanent. Stay steady, be grateful for the highs of the victories, they will pass and learn from the pain of the lows, they too will pass. It requires practice to train your brain to stay on course by regulating the level at which emotions fluctuate. If regulated we can problem solve from an objective perspective, zoom out from the daily noise, and stay focused on your end goals—whatever they may be.

Demand more from yourself and those around you. Excellence isn’t an accident; it’s a habit built over years of consistent effort. Every piece of work you deliver to your peers and clients is a direct reflection of you. Doing things the right way might not always be the path of least resistance. The next time you’re at that crossroads, ask yourself: Which path will you choose?

This ties in with the above concept, but on a broader scale. My father once said,

"If it happens more than once, it’s a pattern."

Certain team members may not perform at the level you need them to. Pay close attention to signals that repeat, especially when people are under pressure. Patterns are powerful indicators—ignore them at your own risk. At the same token, as the employer, it’s important to keep in mind that it is our responsibility to assess employees’ strengths and provide them with the tools to succeed before arriving to a conclusion.

Indecision kills progress. Make the call, own it, move forward. Sometimes, which choice you make is less important than making a choice and committing to it. We should never settle for mediocrity, but on the flip side, don’t let the desire for perfection hold back action. Ask yourself: How realistic is it to be exceptional at something you’re doing for the first—or even the fifth—time? Mastery requires repetition, time, and usually a few lessons along the way. Once you commit, things tend to fall into place. The target seeks the arrow—your decision to commit is the target.

Every day, every interaction, every piece of material ingested presents a new opportunity to learn, reflect, and apply. It’s about knowing when it’s the right time to put what you’ve learned into practice. My intention is to continue personal and corporate growth into Q2 with some fresh, relevant reminders and reflect on how I’ve applied them in the coming three months.

Relevant Reminders Through Q1

In recent decades, the construction industry, known traditionally for its resistance to change, has witnessed a digital revolution. With the integration of innovative technologies, the landscape of construction is evolving, offering enhanced efficiency, precision, and sustainability. From augmented reality to drone surveying, digital advancements are driving unparalleled transformation in the industry.

Emerging Technologies Reshaping the Construction Realm

: No longer just a buzzword, BIM has become an industry standard. By creating virtual 3D models of construction projects, BIM facilitates better visualization, planning, and collaboration between stakeholders, ensuring projects are completed faster and more efficiently.

: These airborne devices offer an aerial perspective, revolutionizing site inspections. With drone technology, large and inaccessible sites can be mapped and surveyed with precision, providing invaluable data for project management.

: Hard hats with augmented reality (AR) capabilities, smart vests, and boots equipped with sensors are enhancing worker safety and productivity. These wearables can detect fatigue levels, hazardous environments, and even streamline communication on the field.

: Imagine "printing" an entire building! 3D printing in construction allows for the creation of complex architectural elements, reduces material waste, and can even expedite the construction process.

Artificial Intelligence (AI) and Machine Learning (ML)

: AI-powered machinery can predict maintenance requirements, while ML algorithms can forecast potential project delays. These technologies, combined, result in better decision-making and optimal resource allocation.

The Green Movement: Sustainable Construction Through Technology

With increasing concerns about climate change and environmental degradation, sustainable construction is no longer optional. Technologies such as prefabricated construction modules and energy-efficient smart buildings are leading the way. Digital platforms allow for optimal utilization of resources, ensuring minimal waste and a reduced carbon footprint.

While the potential benefits are enormous, the integration of technology in construction doesn't come without its challenges. There's a steep learning curve involved, requiring significant investment in training and upskilling. Data privacy concerns, particularly with cloud-based solutions, and the initial cost of technological integration can also pose hurdles.

The marriage of construction and technology signals a new dawn for the industry. As stakeholders continue to embrace and invest in these digital tools, the future of construction promises to be more efficient, safe, and environmentally friendly. As with any transformation, challenges exist, but the potential rewards for those willing to innovate are boundless.

With the integration of innovative technologies, the landscape of construction is evolving, offering enhanced efficiency, precision, and sustainability.

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