Skanska warns of cost risks on key materials as tariffs loom

Dan Görgü

0

In an interview with Construction Manager magazine, Steve Stouthamer, Executive Vice President of Project Planning at Skanska, highlighted reinforcing steel, structural steel, aluminum curtainwall systems, piping, ductwork and Canadian lumber as materials facing significant price pressures if the proposed 25% duties take effect.

“The materials being impacted the most are products made from steel and aluminum,” Stouthamer stated. “Steel prices have increased 15% to 25% since the beginning of January and aluminum is also up 8% to 10%.”

He added that lumber has seen a 10-15% cost hike already in anticipation of being included in the reciprocal tariffs.

The new 25% tariffs would compound existing duties on steel and aluminum imports, potentially resulting in a 50% total levy if implemented fully against Canada and Mexico. While the ultimate scope remains fluid, Skanska is taking proactive steps to mitigate the impacts.

“Projects can benefit by investing additional time into the mapping of the specified materials to determine their source, if those sources are impacted by tariffs and whether alternative products and sources could mitigate financial risk,” Stouthamer advised.

The contractor’s strategic sourcing teams are also working closely with fabricators and the supply chain to evaluate options and pricing scenarios. But Stouthamer cautioned significant budget pressures seem unavoidable in the near-term.

“Tariff cost impacts will put pressure on project budgets,” he said. “Many of those are already challenged by the significant period of escalation experienced post-pandemic.”

As one of the industry’s largest contractors, Skanska’s warnings about potential materials cost volatility from the tariffs are likely to resonate across the construction sector. Diligent supply chain mapping, product evaluation and supplier engagement will be crucial for firms to survive the latest global trade disruption.