It may not be easy, but construction is bouncing back, according to Skanska’s Summer 2025 Construction Market Trends Report. Total construction starts were up 16% in June 2025 to a seasonally adjusted annual rate of $1.33 trillion, driven by strength in manufacturing and data center construction.
“Uncertainty has been the defining topic of the construction industry in 2025 as evolving policies and market pressures create unprecedented challenges for owners and builders alike,” said Steve Stouthamer, executive vice president of project planning at Skanska USA Building. “Despite this, many projects are not only advancing but finding new opportunities, highlighting the critical importance of staying closely connected to the supply chain, shifting market conditions and proactive planning in today’s complex environment.”
Leveraging its Composite Construction Index, the report analysis of and insights into the current state of the construction industry, highlighting the impact of tariffs on material availability, project costs and scheduling.
With 17 of the 25 countries targeted by new tariffs accounting for less than 1% of total US imports, the majority of the new country-specific tariffs that took effect on August 1 are expected to have little to no impact on construction material pricing.
The most significant effects will be felt on materials imported from the European Union (EU), Mexico, and Canada. However, goods imported from Canada and Mexico may be eligible for tariff exemptions if they are compliant with the United States-Mexico-Canada Agreement (USMCA).
Even so, construction costs remain volatile, especially for key materials like copper: in 2025, prices for common copper pipe diameters are up over 40%, while copper wire has risen 14% to 17% since the start of the year. Wide flange steel prices increased nearly 10% including a $40 per ton jump in June. The average price of one yard of concrete is up 9% year-over-year with minor tariff impacts since three-quarters of U.S. cement is produced domestically, and mineral wool insulation prices increased by 8% in July, driving bid prices higher.
Lead times for HVAC equipment remain stable but a 10% to 12% price increase is expected in 2025 due to tariffs and demand, lead times for large data center generators have improved but still range from 37 to 104 weeks, and electrical gear lead times are decreasing yet remain high for switchgear, switchboards and transformers, with prices up 8% to 10%, driven by tariffs and demand.
