INDUSTRY NEWS
BUILDING BETTER COMPANIES
Margins Under Fire How contractors are navigating tariffs, pricing pressure and project risk
By Jane Gentry
This week your supplier sent a revised quote. Steel mill products are up 20.7% year-over-year. Aluminum is up 33%. Copper and brass are up 15.7%. Framing lumber is at $872 per thousand board feet, up roughly 13% from where you budgeted. That’s before the tariff layer—50% on steel, aluminum and copper; 10% on softwood lumber. The job you won is the job you’re losing money on. You’re not alone. An AGC-NCCER survey found that 43% of general contractors have cancelled, postponed, or scaled back at least 1 project in the past six months, with material costs cited as the direct cause. Nonresidential construction input costs ran at a 12.6% annualized rate in January and February of 2026—the fastest pace since the supply-chain peak of early 2022, per Engineering News-Record’s Q1 2026 Cost Report. Every owner in your market is reading the same numbers. Most are doing the same thing with them: measuring the damage, calculating the exposure and waiting to see what happens next. That’s understandable. It’s also the wrong response—not because you’re uninformed, but because measuring what’s happening and managing through it are two entirely different things.
The Thermometer and the Thermostat
Y
ou submitted that bid 8 months ago. Steel was running where it had been for two years. You priced it accordingly, built in a reasonable contingency and
won the job. Fixed price. Good client. Workable timeline. 28
COMMERCIAL CONSTRUCTION & RENOVATION — ISSUE 5, 2026
Here’s a framework I use with clients when markets turn volatile. A thermometer tells you what the temperature is. Accurate, useful, completely passive. When the environment shifts, it shifts with it. That’s all it does. A thermostat holds a temperature. It’s set to a target, and when conditions drift from that target, it activates. It doesn’t report the environment—it responds to it, until things return to where you decided they need to be.