US Construction Sector NAICS 23

Oct 4, 2025 - Fresh Round of Tariffs on Building Materials

• Beginning on October 14, 2025, the US will add 25% levies on cabinets, vanities, and unupholstered furniture imports, and 10% tariffs on wood floors, lumber, and wood, according to The New York Times. Industry watchers say the new tariffs will significantly raise construction and renovation costs for U.S. homebuilders. With duties reaching up to 50% on some items by January, builders who rely on foreign materials warn of project delays and increased uncertainty. The National Association of Home Builders estimates that 7% of materials used in new residential construction are imported. Industry leaders fear the added costs will be passed on to consumers, making homeownership and renovations more expensive while slowing new home construction, deepening the housing shortage, and offsetting any relief from falling interest rates.
• Rider Levett Bucknall’s latest Crane Count reveals a 44% drop in crane activity across 16 North American cities, signaling a slowdown in construction momentum. While cities including Chicago, Denver, and San Francisco saw increases, major markets such as New York and Los Angeles experienced sharp declines due to project completions, financing constraints, and high interest rates. The report highlights a fragmented landscape where rising national construction costs contrast with uneven regional activity. This unevenness suggests the sector is in transition, with developers cautiously navigating economic pressures and shifting demand.

• Single-family housing starts fell 7% month-over-month and decreased 11.7% year-over-year in August. The number of building permits issued for single-family, privately-owned housing units dropped 2.2% month-over-month and fell 11.5% year-over-year in July 2025. With just 890,000 single-family homes breaking ground, August marked the lowest activity since April 2023. Builders may be slowing production amid a mounting oversupply of new homes on the market, according to Reuters. The Federal Reserve cut its benchmark overnight interest rate from 4.25% to 4.0% on September 18 amid a tepid labor market, and the central bank is expected to announce more cuts before the end of the year. In anticipation of the Fed rate cut, mortgage rates moved lower earlier in September. Industry insiders hope rate cuts will ease a prolonged housing slump.
• Construction firms that work on civil infrastructure projects are holding steady as they manage uncertainties, including waning backlog growth and weaker margins, according to FMI’s third-quarter Civil Infrastructure Construction Index (CICI) survey. The CICI reading for the third quarter was 50.8 compared to 52.2 in Q2 2025 – on a 100-point scale. Any CICI reading above 50 indicates that more civil infrastructure contractors see conditions as good than poor. While about 52% of firms surveyed said their work backlogs had risen in Q3 2025 compared to a year earlier, only 25% expected backlog growth in Q4. While civil infrastructure firms expect backlogs to ease, margins remain under pressure from competitive bidding and higher costs. FMI expects firms to focus on project selection and cost controls to improve margins, as higher work volumes are a less reliable profitability boost.