Cost pressure in U.S. housing supply chains is rising steadily, with building materials showing a 0.67% average monthly price increase in 2024 and ocean freight rates 18% higher in 2021 than in 2019, compounding broader disruption costs that reach 2.5% of U.S. 4.5% year-over-year increase in the PPI for residential construction inputs in April 2024 (producer price measure for inputs relevant to housing construction) $1.9 billion annual global cost attributed to logistics inefficiencies for construction supply chains (housing components transport costs). These procurement and logistics issues contributed to a 2.5% loss in U.S. Even contractors’ prefab operations are somewhat detached from the specific markets where data centers are actually being built.
Our experts—many with first-hand industry experience—work alongside you and your contractors to unlock the full value of your risk management program. Greater transparency on pricing, improved policy certainty and continued collaboration between industry and Government will be essential to support confidence, investment and a sustainable recovery in construction activity.” “The Group continues to encourage early engagement and clear communication throughout the construction supply chain. The Group believes that early clarity on housing, planning and infrastructure priorities will be important for restoring confidence across the https://www.digital-photo-lab.com/GreenCamera/green-camera-for-starters construction supply chain. “The recent change in political leadership has added another layer of uncertainty at a time when businesses are already navigating a challenging economic environment. The work of the CLC on this is ongoing, and industry bodies are seeking a review process to address any emerging issues.
Active measures are in place to ensure that all SCAPE delivery partners act with transparency and integrity, pay their supply chains fairly and promptly, and adhere to ethical labour best practice. As the leading public sector procurement authority, SCAPE is committed to ethical spending of public funds and raising the standards of procurement. Tier 3 contractors are smaller businesses subcontracted by Tier 1 or Tier 2 contractors that are more local trades and suppliers. Tier 2 contractors are also known as subcontractors, working under the main contractor during large construction projects. “Of course, as we’ve always done, we evaluate our network to make sure it fits our business needs and to improve the experience for our employees, customers, partners, and drivers,” Kelly said. What is driving these major disruptive trends?
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A project manager normally manages the budget on the job, and a construction manager, design engineer, construction engineer or architect supervises it. According to McKinsey research, productivity growth per worker in construction has lagged behind many other industries across different countries including in the United States and in European countries. As a sector, construction accounts for more than 10% of global GDP (in developed countries, construction comprises 6–9% of GDP), and employs around 7% of the total employed workforce around the globe (accounting for over 273 million full- and part-time jobs in 2014).
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Wood Mackenzie projects that data centers could account for as much as 40% of total US electrical equipment demand by 2030, up from a historically low single-digit share. Rising rack densities toward 200 kW are forcing changes in electrical distribution and cooling design. Boucher said substation transformer lead times have stretched from roughly 140 weeks in 2023 to more than 160 weeks in 2026. Similar growth is expected across switchgear, transfer systems, and power distribution units (PDUs).
- Pharmacy price growth is projected at 2.84%, down from 3.35% just six months ago.
- Construction project delivery in 2026 is being shaped by strong demand in digital infrastructure, energy, advanced manufacturing, life sciences and public infrastructure.
- Some firms would likely bring steel purchases forward to avoid higher prices, he said, while others could delay decisions until there was more clarity on the treatment of quotas, individual product categories and fabricated imports.
- Goldman Sachs has no obligation to provide updates or changes to these forecasts.
- The changes to tariff treatment for agricultural equipment and industrial goods, as well as the derivative production expansion, will stay in effect until Dec. 31, 2027, per the proclamation.
- The construction industry continues to face substantial challenges in meeting original project schedules.
- Construction has been identified by the National Institute for Occupational Safety and Health (NIOSH) as a priority industry sector in the National Occupational Research Agenda (NORA) to identify and provide intervention strategies regarding occupational health and safety issues.
- There has been a notable increase in construction material prices, with materials in the UAE now amounting to around 60 percent of construction baseline costs.
- But if they are poorly targeted or paired with policy uncertainty or retaliatory actions, they risk driving up costs and slowing deployment.
Taken together, these conditions point to a construction environment where outcomes are increasingly determined by how and where projects advance. At the same time, competitive bidding conditions persist across many regions, even as localized pressure intensifies in markets driven by large-scale data center and infrastructure investment. Construction starts are rising, with strong planning activity across key sectors, including data centers, healthcare, energy and infrastructure, indicating continued project advancement.
Steps in Construction Procurement
“North America’s construction market is returning to growth, but https://power-at-work.com/the-benefits-of-wireless-connectivity-in-construction-equipment-monitoring-and-management/ delivery conditions are increasingly setting the pace. Materials exposure is now central to supply chain assessment, as volatility in inputs such as copper and aluminum can cascade through OEMs, system integrators, logistics, equipment pricing, and delivered-cost risk. Construction commodities continue to drive project costs, with pricing influenced by tariffs, trade protection, and ongoing energy and logistics pressures. Longer lead times for generators and other critical electrical equipment continue to define the critical path across projects. Canada’s growth is expected to moderate in 2026 before anticipated strengthening in 2027, although weaker momentum in early 2026 means that outlook may still shift. US growth is holding up, supported by AI investment, productivity gains, fiscal support, and earlier rate cuts.
