The impact of 50% tariffs on steel, aluminum & copper is expected to show up in the 1st Q of 2026 if tariffs are allowed to remain in place. There are still questions regarding the 15%, 25% & 50% tariffs with the US Supreme Court needing to approve or disapprove this Trump administration order.
Both crude oil & gasoline prices have decrease by more than 5% in the last 3 months.

The price of gold has risen sharply as investors moved their savings to safe-haven assets.

The big question will oil prices drop to $60 or even $50 a barrel levels? It appears that this is impacting major oil companies, as they continue to downsize & lay off staff.

The US Federal Reserve decided to lower interest rates to 4% at their September meeting. Look for another reduction or two in the coming months, with concerns related to low job growth numbers, perhaps related to AI utilization. This rate reduction should be a boost for home builders across all regions of the US.

The US is threatening sanctions / tariffs on both China & India for their continuing purchasing of Russian oil. The US claims these purchases are assisting Russia in its conflict with Ukraine.

Reduced gasoline & diesel prices have been good news for US consumers & the construction sector helping to tamp down prices for the last 9 months. The average price for a gallon of gasoline in the US has fallen to $3.05 a gallon down from $3.29 per gallon a year ago, an 8% decrease.

OPEC voted to increase oil production by 500,000 to 1,000,000 barrels a day which should keep a lid on oil prices for the next 3 to 6 months, this is good news for the US construction sector.

The US tariff situation seems to be in a state of flux. Different comments on this issue, perhaps on a daily basis are reported. 80 + countries have contacted the Trump White House to negotiate better terms related to this problematic tariff issue.

The global construction market is projected to experience another positive year of growth in the 4th Q 2025 if the current 2 regional conflicts in Europe & the Middle East can be resolved. The industry is set to embark on an amazing expansion in the next 15 years growing from $11.7 trillion today to a $20 trillion market, a 75% increase, assuming no major conflicts or geopolitical event arises.

India, China, USA, Brazil, Saudi Arabia, Indonesia & Vietnam will be the leading countries that fuel this expansion.

It appears that the US will do much better than the (27) European Union countries. The new proposed reciprocal US trade tariffs will be problematic for many of the USA’s main trading partners.

Overall Global GDP growth is projected to increase by 2.6% to possibly 2.8% in the 4th Q 2025.

Construction work has resumed on southern border barrier / wall between the USA & Mexico after a 4-year hiatus.

President Trump’s objective is to protect domestic production & US companies & encourage demand for these products by removing / reducing current unfair trade practices. However, it will take possibly 6 to 18 months for US construction materials producers to expand their current manufacturing capability / facilities to meet this new demand. Look for construction to increase by 2.5% to 3% in the next 6 months, if oil prices remain below $65 a barrel.

The best way for an EPC / General Contractor & Sub-Contractors to protect themselves in the coming year(s) is to include a “tariff” related increased cost clause in their future Contracts & Purchase Orders that allows them to recover these increased costs from their client.

These new tariffs are resulting in foreign companies constructing new industrial projects for auto facilities, construction equipment, steel plants, data centers & micro-chip facilities valued at more than $500 billion. It appears that President Trump’s tariffs will not disrupt any ongoing & future capital construction projects. We see numerous data centers & industrial type facilities continuing to move forward all across the USA.
Size of Global / Regional construction markets:

The countries that will experience some of the highest GDP growth in the 2nd half of 2025 include: Guyana, Ethiopia, Niger, Senegal, Libya, UAE, Cote d’Ivoire, Philippines, India & Vietnam.

Note: the vast majority of these countries are large exporters of Oil / Gas, Minerals & Timber products.

Challenges the Global Construction Industry will face in the 4th Q 2025 include:

• President Trump’s new “reciprocal” tariffs on its trading partners could cause a worldwide economic slowdown according to some, not all economic experts.
• The ongoing Russia – Ukraine conflict has created major problems in Europe & around the world; Russia’s use of North Korean troops is making this conflict more dangerous & Russia’s cross border flights over NATO countries such as Poland & some Baltic Countries is a major new problem that could seriously escalate this conflict.
• A full-blown trade war between the US & China (the world’s 2 largest economies) is still a possibility.
• The shortage of skilled construction labor & sub-contractors especially in the USA & Canada.
• In Asia possible flash points remain in the South China Sea – China – Taiwan / the Philippines, North Korea & the continuing China vs. India’s northern border standoff.
• Construction material costs have increased by close to 20% in the last 30 months, however we are seeing this high percentage starting to moderate in the last 6 months.

Hopefully, some of these issues will be resolved in the near future and beyond. The vast majority of construction bulk materials, such as timber / plywood & OSB, steel products (rebar & structural steel), copper products, roofing, cement, concrete and plumbing & electrical components have started to decline from their record high prices experienced back to Pre-COVID levels. Some of these bulk construction materials have declined by as much as 10% to 20%, unfortunately most construction bulk materials (and to some extent) construction related equipment such as HVAC components, pumps, electrical equipment are still 5% to 15% or more expensive than they were 12 months ago.

The need for “low carbon” construction materials is a growing trend; cement, structural steel, rebar & road blacktop are getting looked at very seriously to see how other materials can be utilized such as recycled plastic waste & reinforcing fiber.

Artificial Intelligence (AI) will continue to advance across all areas of the construction industry. The jury is still out on which “people” related jobs will be lost to computer generated (AI) activities. Prominent software development industry leaders predict that (AI) will replace millions of “white collar” workers in the next 5 to 10 years. However, blue-collar workers like Carpenters, Electricians, Plumbers & others may not be impacted by (AI). (AI) is set to revolutionize how Industrial, Infrastructure & Buildings capital projects are Planned, Estimated, Managed, Procured & Executed, bringing increased efficiency through automation & enhanced analysis.