The U.S. construction industry is facing a turbulent 2025 as new federal policies, shifting tariffs, and rising material costs reshape what had been a stabilizing post-pandemic market. According to Skanska’s Summer Market Trends Report, the defining theme of the year so far is clear: uncertainty.
After a few years of economic recalibration following COVID-19 — with skyrocketing costs, an overheated tech sector, and declining demand in commercial office — the first two quarters of 2025 have thrown a wrench into what many hoped would be a path toward normalization.
Policy shifts from the Trump administration have introduced serious doubt across sectors, raising new questions about funding for healthcare infrastructure, the future of federal public works, and supply chain resilience amid a new wave of tariffs.
“Owners are asking: Will our healthcare system still receive critical funding? What infrastructure projects are now in jeopardy?” the report states, adding that questions about ICE’s impact on labor and uncertainty around the One Big Beautiful Bill and renegotiated CHIPS Act have added new layers of risk.
A Fork in the Road: Pullbacks and Push-Throughs
While several capital projects have been delayed or shelved in response to the policy environment, Skanska notes that many others are moving forward — and some are even benefiting. As competition thins and subcontractors look for work, bidding conditions have improved, and some projects are meeting budget targets that were previously out of reach.
Still, this opportunity comes at a cost. The reduction in overall project volume has created a cooling effect in some local markets, limiting the pipeline of available work — particularly for specialized trades.
Tariff Impact: Copper and Steel Prices Surge
One of the most immediate and tangible impacts of the Trump administration’s new policies is on construction material pricing, especially due to new tariffs on key imports:
| Material | Canada | Mexico | China | Tariff Range |
|---|---|---|---|---|
| Steel | 50% | 35% | 30–55% | |
| Aluminum | 50% | — | — | |
| Copper | 50% | — | — | |
| Lumber | 27.5% |
The steep 50% copper tariff is expected to have the most profound effect. Copper — used in electrical wiring, piping, HVAC systems, and structural components — has already seen sharp price increases in 2025. Copper pipe prices are up more than 40%, while copper wire has risen 14–17% since January.
Steel and aluminum are also under pressure, and although USMCA-compliant imports from Canada and Mexico may be eligible for tariff exemptions, navigating that compliance is adding complexity and delay.
Despite the long list of countries included in the new tariffs, the report notes that only a handful — particularly the EU, Mexico, and Canada — account for significant U.S. construction material imports, meaning the most dramatic effects will stem from those relationships.
Local Markets and Strategic Flexibility
In the face of national uncertainty, Skanska advises project stakeholders to look closely at local market dynamics. In some regions, a pause in new starts may present rare windows for cost savings, especially for projects that are well-capitalized and ready to proceed.
Some manufacturers, Skanska notes, are already adapting, restructuring supply chains and adjusting sourcing strategies to blunt the impact of tariffs and stabilize pricing.
As 2025 progresses, the U.S. construction industry finds itself in a precarious balancing act — navigating policy-driven disruption while trying to seize fleeting market opportunities. Amid rising material costs, labor uncertainty, and regulatory shifts, flexibility, speed, and local insight will be more critical than ever for project success.
The one word on everyone’s lips? Still uncertainty — and that’s unlikely to change anytime soon.
