The US construction sector is facing twin pressures from trade policy and labor shortages. Although materials most heavily used in construction, such as lumber, cement and energy products, are mostly domestically manufactured, that does not mean the industry is immune to rising commodity prices and supply chain disruptions. Construction materials are traded on global commodity markets, which are extremely susceptible to trade disturbances.
Just the threat of tariffs on key building materials such as lumber, steel and aluminum raised input costs at the start of 2025. Supply chains will remain complex as domestic producers cannot ramp up fast enough to meet demand; major exporters like Canada, the European Union and China will continue to fill an important role.
Meanwhile, immigration policies heavily influence construction projects and wages. Immigrants make up about 25% of all construction labor, second to only agriculture with the highest share of immigrant workers.
This report analyzes how past and current tariffs have impacted construction, how businesses responded and what the latest round of tariffs means for the industry. It also examines the role of immigration in alleviating labor shortages in residential and commercial construction.
KPMG