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Office Construction Costs Decline, Yet Headwinds Continue
A tapering off of inflation has led construction cost increases to drop below their five- and 10-year averages, but the sector still faces uncertainties due to new U.S. tariffs on imports from key trading partners like Canada and Mexico, Cushman & Wakefield said Tuesday. Rising labor costs and prices of commodities such as lumber, steel, copper and cement are expected to continue through the year, according to Cushman & Wakefield’s Winter 2025 General Contractor Sentiment Survey.
“While we’re seeing the pace of inflation slow on construction costs, there remain serious headwinds and uncertainty about the impact of tariffs and labor shortages on the construction industry,” said Brian Ungles, president, Project & Development Services, Americas. “Our survey shows that general contractors expect permitting times will continue to be a major pain point as well.”
The new office construction pipeline has declined 40% across the Americas year-over-year. A lack of new office deliveries means occupiers may need to focus on upgraded fit-outs in existing space.
- ◦Development
