Report: Construction industry faces price increases

The cost of construction is increasing nationwide, including Florida, where the industry accounted for $97 billion, or 5.7%, of the state’s gross domestic product in 2024, according to Florida TaxWatch.

Contributing to the increase in construction costs are inflation, trade agreement uncertainty and supply chain disruptions, the report from the government watchdog and taxpayer research institute says.

In Florida, “the construction industry is expected to grow by 7% in 2025, with a focus on mixed-use and infrastructure developments,” Florida TaxWatch President and CEO Dominic Calabro says in a statement.

“Although contractors remain positive about the construction industry," Calabro says, "prices in the sector have increased throughout the state, and higher prices are anticipated due to uncertainty in the trade market.”

Wood alone has increased in price 8.2% from June 2024 to June 2025 in the Southeast U.S., the Florida TaxWatch report says.

Tariffs are a factor in the uptick in construction costs. Approximately 7% of materials used in residential construction were imported in 2024, according to the National Association of Home Builders. Gypsum, a crucial component in drywall, comes from Mexico, while 75% of the imported lumber comes from Canada, Florida TaxWatch reports.

Currently, Mexican goods are subject to a 25% tariff, while there is a 35% tariff on imported lumber from Canada.

“As of August 2025, there is a 50% tariff on all steel, aluminum and copper imports in the U.S. and economists state that the construction industry, at present, is very volatile in terms of demand and supply — which normally means prices are volatile as well,” Florida TaxWatch Executive Vice President and General Counsel Jeff Kottkamp says in a statement. 

“The current situation with tariffs is very fluid," Kottkamp adds," and the best way to plan ahead, for anything construction related, is to stay constantly informed about trade laws and tariffs regarding construction materials.”

Because materials are more expensive, homebuilders have reported seeing an increased construction cost of about $10,000 per home, Florida TaxWatch reports. According to the report, ways to take the burden off consumers include finding alternate suppliers, stabilizing existing supply and developing national strategies for cost-saving.