Spring 2025 Update

Industry Trends Report

Randy Boettcher
Sr. Director of Preconstruction and Estimating

Through the first quarter of 2025, tariff exposure has emerged as the dominant conversation topic across owner, developer, designer, and general contractor offices, as well as the trade partner supply chain.

With constant volatility in tariff rates, effective dates, affected countries, and tariff exemptions, the potential impact to projects is constantly evolving and obscured with each morning’s news headlines.

This spring edition of Sellen’s Industry Trends Report contains key insight into the supply chain of all major building systems with our predictions for which systems will be more insulated from tariffs and which will be more susceptible. While we are still exploring the question of how tariffs will directly impact the bottom line for projects, we hope this provides greater insight into areas of project risk and which specific building elements should be monitored as tariff regulations continue to evolve. We’ve also included four key mitigation strategies that will help teams better manage projects through tariff uncertainty.

I hope this edition of Industry Trends provides meaningful insight and strategies. As always, I look forward to your questions and thoughts on how we can partner together to create clarity on our shared projects in this uncertain time.

Best,

Randy Boettcher

Featured Updates

Tariff Impacts & Mitigation Strategies
Dive into our predictions for potential tariff impacts for each major building system.
Labor Updates
A primer on potential labor wage increases in 2025 and 2026 for major trades.
Contact Us
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Tariff Impacts & Mitigation Strategies

Below are four key mitigation strategies to help reduce tariff impact, followed by insights regarding tariff vulnerability of major building systems.

Material & Equipment Specifications

To the extent possible, ensuring your project material and equipment specifications include domestically manufactured options is the first way to minimize tariff exposure. Even when an international product is preferred, including both domestic and international options will enable bidding subcontractors to evaluate and isolate any tariff premiums, providing leverage when negotiating tariff mitigations with international suppliers.

Early
Procurement

Tariffs are changing the landscape of which international materials are pre-stocked and warehoused as short lead-time, U.S.-based inventory. Tariffs may trigger increased lead times for post tensioned reinforcing cable, elevators, MEP materials & equipment, and other building system components. Early procurement may also create opportunities to negotiate a fixed price, transferring tariff risk to suppliers & trade partners. Early procurement can also lead to early fabrication and delivery, ultimately resolving tariff risk as materials cross the border.

Negotiate Fixed Pricing for Life of Project

Currently, demand across many market sectors remains low and competition for U.S. market share remains high, motivating international suppliers to partner with project teams on tariff mitigations where possible. The strong U.S. dollar continues to motivate many Canadian aluminum and mass timber suppliers to partially absorb tariffs, and there are instances of Canadian suppliers providing firm pricing and taking on tariff risk as a negotiation point of project awards.

Project-Specific
Analysis

Currently, we are conducting a supply chain analysis for every project in preconstruction to understand the potential tariff exposure for each project element. We are working with owners to calculate the potential tariff impacts, enabling the development and joint management of tariff contingencies. Sellen and our trade partners are including the current tariffs in place in estimate deliverables, and providing contingency recommendations for potential future tariff impacts.

Concrete Supply

Domestically sourced sand and gravel aggregates, which are not vulnerable to tariffs, comprise ~80% of ready-mix concrete cost.
Internationally sourced limestone cement and slag, which are vulnerable to tariffs, comprise ~20% of ready mix concrete cost. Limestone cement is primarily sourced from Canada, Vietnam, China, and Taiwan; slag is primarily sourced from Japan.
Current concrete pricing is ~$175/CUYD for a 4,000-pound mix. If 20% of this cost is subject to a 25% tariff, the unit cost will increase by $8.75 from $175 to $183.75/CUYD.

Reinforcing Steel (Rebar) & Structural Steel

Domestic rebar and structural steel manufacturing capacity currently exceeds demand, resulting in stable pricing.
U.S. rebar and structural steel mill capacity increased in 2024 and additional capacity is coming online in 2025.
Over 90% of rebar placed and steel erected in the Pacific Northwest region is domestically sourced and insulated from tariff exposure.
Competition between domestic mills will insulate steel prices from tariffs until domestic demand nears domestic capacity, at which point tariffs will contribute to accelerated steel price increases.

Post-Tensioned (PT) Reinforcing Cable

Over 90% of PT cable placed in our region is sourced from Asian markets, so PT cable pricing is highly vulnerable to tariff exposure.
Historically, domestic PT cable has trended 40% more expensive than PT from Asian markets.
Tariffs may reduce domestic inventory of Asian PT, resulting in longer lead-times.

Mass Timber

Currently, Canadian-sourced and manufactured mass timber products remain exempt from tariffs under the USMCA (United States-Mexico-Canada Agreement); this exemption is expected to remain in place throughout 2025.
If the USMCA exemption is repealed in 2026, the strong U.S. dollar and mill capacity that is well in excess of demand enables Canadian mass timber manufacturers to partially absorb tariffs.
With mill capacity in excess of demand, domestic mass timber manufacturer pricing remains stable. There will be continued competition with Canadian fabricators due to the USMCA exemption.
As a manufactured wood product, mass timber is currently exempt from softwood lumber tariffs.

Aluminum Window Systems

Domestic aluminum window system and glass manufacturing capacity currently exceeds market demand. Until market demand approaches manufacturing capacity, pricing is projected to remain stable.
Aluminum billet used in window system extruding is primarily sourced from Canada; however, major manufacturers have 12-24 months of billet on hand in the country, deferring immediate tariff impact.

Elevators

Depending on the manufacturer, high-rise elevators and escalators are predominantly manufactured in China.
Depending on the manufacturer, MRLs and hydraulic elevators are predominantly manufactured in the country, but it is via an international supply chain.