The U.S. construction industry is facing dual challenges that threaten to disrupt its already fragile balance: labor shortages stemming from immigration policies and rising material costs driven by proposed tariffs. According to a report by the Pew Research Center and the Harvard Joint Center for Housing Studies, undocumented workers make up over 13% of the national construction workforce, with that figure climbing above 50% in construction-heavy states like California and Texas.

Labor Shortages from Immigration Policies
Economists and major builders, as reported by The Wall Street Journal, warn that mass deportations will exacerbate workforce shortages, increase wages, and delay projects. Research from the University of Utah and the University of Wisconsin highlighted the aftermath of over 300,000 deportations between 2008 and 2013. This led to countless unfilled construction roles, a year’s worth of lost productivity in the average county, and a 20% rise in new housing prices. The looming threat of large-scale deportations raises serious questions about the industry’s ability to meet housing demands.

Rising Lumber Costs and Tariffs
On the materials side, the cost of 2 x 4 lumber and mass timber products is set to soar under new tariff plans. President Trump has proposed a 25% tariff on Canadian goods, including softwood lumber, compounding the existing 14.54% tariff. Such measures could drive up construction expenses significantly, especially as the U.S. housing market remains tepid. For many, these price increases recall the previous administration’s trade policies, which sparked discussions about boosting domestic production of cross-laminated timber (CLT) and glulam.

While more than 2,000 mass timber projects are under development nationwide, Pat Jolley of Forisk Consulting notes that the U.S. mass timber industry is still in its infancy. “It remains to be seen how new trade policies will impact its growth,” Jolley remarked. Without significant investment in domestic manufacturing, the reliance on imported materials could further strain project budgets.

Source: forestry.com