Last Updated 07/09/2025
The commercial construction market in Q2 2025 remains generally stable, with moderate cost changes and steady demand. Key materials are showing a mix of trends: some have leveled off after last year’s highs, while others continue to rise. Although pricing has mostly stabilized, evolving trade tariffs and supply chain factors could affect costs in the second half of the year. Avara continues to monitor these developments.
Several shifts stood out in Q2 2025. Petroleum prices dropped significantly year over year, helping to reduce overall construction costs. Electrical components like switchgear saw the highest increases, driven by supply chain delays and continued demand. Metal pricing was mixed, as copper dipped slightly while steel rose. Lumber costs are up from last year but have started to stabilize. Overall, construction material prices increased about 4% compared to Q2 2024.
Concrete: Prices rose ~2.5% YoY, with minimal month-to-month changes indicating a stable market.
Copper: Down ~2% YoY, with recent leveling suggesting balanced supply and demand.
Gypsum Wallboard: Nearly flat, with prices up ~1% YoY and stable throughout Q2.
Iron & Steel: Up ~5% YoY, with consistent Q2 gains signaling renewed demand.
Lumber: Up ~8% YoY but still well below 2021 peaks, with pricing starting to stabilize.
Natural Gas: Prices remained flat YoY, contributing to cost stability for energy-reliant materials.
Glass: Up ~2% YoY, with minimal monthly movement and stable supply.
Tariff-related uncertainty continues to affect pricing in select categories. While most essential materials like concrete, gypsum, and steel are typically sourced domestically and remain relatively stable, others rely more heavily on international suppliers and are at greater risk of price fluctuations or delays.
Products such as post-tension cables, elevators, switchgear, and some mechanical and electrical components remain sensitive to tariff changes and extended lead times. Many of these items are still subject to longer delivery windows than before 2020, due to increased demand for certain products while ongoing global supply chain constraints remain.
To manage these risks, Avara researches the availability and lead times of specified or engineered materials early in the process. If a product poses a delivery risk, we work with design teams to propose alternates that offer faster lead times or more predictable outcomes. These steps help keep projects on schedule and within budget, even when market conditions are uncertain.
Labor availability and costs remain key factors in construction planning. Compared to the extreme shortages of the past few years, the overall supply of construction labor has modestly improved, with more tradespeople returning to the workforce. However, demand for skilled labor remains high, particularly in electrical, mechanical, and finish trades. Wages rose approximately 3% year-over-year in Q1 2025, driven by cost-of-living increases and the anticipation of labor contract renegotiations in several major unions.
Construction activity in the Seattle area remains steady but modest, with growth lagging behind national trends. Most material prices have stabilized within a more predictable range, though trade policy shifts and labor costs could create pressure in certain scopes.
Moderate cost increases are expected to continue, especially in labor-heavy trades and specialty materials. With careful planning and close tracking of market trends, projects can move forward with greater confidence in the second half of the year.
Based on our local data, these are the trends we’re seeing for material procurement. Most material procurement timelines have returned to more stabilized durations after significant procurement volatility and supply chain disruptions over the last couple of years. Still, many lead times are extended relative to historical norms for some specialty items, fixtures, and equipment.
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