Are you ready for Oct. 14th when lumber tariffs hit?
Let’s walk through the biggest news affecting your construction business for the week of September 27th to October 3rd, 2025. We have some major developments on material costs and the labor market that you need to know about.
New Tariffs Hit Lumber and Cabinets
New tariffs on imported building materials are set to take effect on October 14th. The government has imposed a 10% tariff on lumber and a steep 25% tariff on kitchen cabinets and furniture. This move will directly increase your project costs and squeeze profit margins.
Why it matters for contractors: You must review any outstanding bids for projects involving kitchen remodels or significant lumber use. We recommend contacting clients immediately to discuss potential price adjustments for contracts not yet signed. For upcoming projects, you should update your estimates to reflect these new costs before the October 14th deadline.
Source: https://www.nahb.org/blog/2025/09/section-232-tariffs
Next on our walkthrough, let’s look at a surprising shift in the labor market.
Construction Job Openings Plunge to Decade Low
Data released this week shows construction job openings fell to their lowest point in nearly a decade. Openings dropped by 38% compared to last year as economic uncertainty and high interest rates have started to slow down new project demand. This indicates that the market is tightening, and employers are not rushing to replace workers who leave.
Why it matters for contractors: The long-running narrative of a severe labor shortage may be shifting. While finding skilled labor remains a challenge, this data suggests that a broader market slowdown is becoming the more pressing issue. This is a signal to manage your growth expectations and focus on locking in a solid project pipeline.
Source: https://www.thecentersquare.com/national/article_7a7c2e1d-1611-45aa-9675-390a0afb111e.html
Now, let’s talk about what this means for your pricing on remodeling jobs.
Remodeling Costs Continue to Outpace Inflation
Even before the new tariffs, the cost of remodeling work was rising faster than general inflation. New data shows remodeling costs increased 3.4% in the second quarter, driven primarily by higher labor expenses for trades like tile setters and carpenters. The good news is that homeowners are still spending, with 69% of residential pros reporting that clients are actually increasing their project sizes.
Why it matters for contractors: This data helps you justify price increases to your clients. You can explain that labor costs are the main driver, a factor that is affecting the entire industry. Despite the higher prices, clients are still investing in larger projects, which is a positive sign for the renovation market.
Finally, let’s touch on technology.
AI Adoption in Construction Remains Low
A new survey reveals that most construction firms are not using Artificial Intelligence. Despite a lot of hype, 45% of companies have no AI implementation at all, and less than 1% use it across their entire organization. This suggests that small contractors are not as far behind the technology curve as they might think.
Why it matters for contractors: You don’t need to feel pressured to invest in complex AI systems right now. The industry is still in the very early stages of adoption. This gives you an opportunity to focus on practical, proven business methods while keeping an eye on how AI tools develop over time.
Source: https://www.constructiondive.com/news/builders-ai-survey-adoption-gap-construction/761632/
Conclusion
That completes this week’s walkthrough. The key takeaway is that the market is in a state of flux. Material costs are about to jump due to tariffs, and while the labor market is cooling, remodeling demand from homeowners remains strong. Successful contractors will be those who can adapt to these changes quickly, manage their costs carefully, and clearly communicate their value to clients. We will continue to monitor the impact of these tariffs as they take effect in the coming weeks.
