Unraveling the Knot: Supply Chain Issues in Residential Construction
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.
According toAltus Group, 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,” saysPeter Norman, 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:
Electrical:
- Conduit: +25–30%
- Wire: +10–20%
- Generators: +10%
- Lighting: +10–20%
Mechanical/Fire Protection:
- Victaulic: 4.75% increase in January, another 4.5% expected in June
- Viking (sprinkler heads & CPVC): +10%
Finishes:
- Paint products: +10%
- Drywall & gypsum: +5–10%
Framing
- Metal framing: Increases up to 20%
Real Increases vs. Strategic Markups
One of the toughest parts of this environment is figuring out what’sreal. 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 shouldexpect more increases through the coming months—especially as tariff impacts become clearer.
What We’re Doing at Virgili Group:
- 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
