Rising Tariffs, Rising Costs:
What Contractors Need to Know This Fall
By Dipa Gandhi
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Rising Costs Contractors Can’t Ignore
This fall, homeowners planning renovations are facing higher costs, and service contractors are feeling the squeeze. The latest tariffs on imported materials—especially steel, lumber, aluminum, and certain manufactured goods—are driving up the price of core supplies. According to the National Association of Home Builders, material costs already account for 50–60% of most renovation projects, and tariffs are adding an extra 10–25% in some categories.
For contractors who quote jobs months in advance, this shift can mean working at a much tighter margin—or even losing money if they don’t adjust pricing in time.
When Materials Cost More, Projects Stall
Higher costs don’t just affect the bottom line—they ripple across the entire renovation cycle:
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Delayed Projects: Homeowners facing unexpected price increases are postponing or scaling back renovations.
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Profit Squeeze: Contractors are caught between honoring old estimates and absorbing new costs.
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Competitive Pressure: Some contractors cut corners or use lower-quality materials to stay within a customer’s budget, risking their reputation.
Consider a real example: A small roofing contractor in Ohio shared that his asphalt shingle supplier raised prices three times in six months due to tariff-driven import costs. A job that should have cost him $8,000 in materials ended up at $10,500—completely erasing his profit.
These ripple effects can erode trust with customers and create uncertainty in scheduling, labor allocation, and overall growth.
How Contractors Can Adapt
While contractors can’t control tariffs, they can control how they prepare and respond. Strategic planning and communication are key:
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Update Estimates Frequently: Shorten the validity period of quotes to 15–30 days instead of 60–90.
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Build in Contingency Clauses: Add clear language about potential material surcharges in contracts.
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Educate Customers: Share why costs are rising. When customers understand that it’s due to tariffs and not price gouging, they’re more likely to stay loyal.
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Diversify Suppliers: Sourcing from regional or domestic manufacturers may provide stability, even if prices are higher initially.
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Focus on Efficiency: Lean on technology and scheduling tools to cut wasted labor hours that eat into margins.
One painting contractor in Texas implemented a “real-time pricing” update system with suppliers. Instead of waiting for monthly pricing sheets, he gets weekly updates and adjusts his bids accordingly. This proactive step not only protects his profit but also builds credibility with customers who appreciate transparent communication.
Looking Ahead
Tariffs may continue into 2026, making it clear that higher costs are not just a short-term inconvenience. Contractors who adapt their pricing structures, improve customer communication, and streamline operations will weather the storm more successfully than those who ignore the issue.
Homeowners still want their renovations, and contractors who provide clarity and fairness—even in a turbulent market—will stand out as trusted professionals.
