Construction is a cornerstone of Florida's economy, contributing $97 billion (5.7 percent) to the state's GDP in 2024. However, rising material costs are presenting significant challenges to the industry, impacting everything from large-scale infrastructure projects to residential home building and affordability for Florida taxpayers. This report examines the national and statewide trends driving these price increases and their potential consequences.
Key Findings:
- National Prices Remain High: Since the COVID-19 pandemic, the cost of construction materials has risen substantially across the U.S. due to supply chain disruptions, labor costs, inflation, and trade uncertainty. The Producer Price Index (PPI) for construction materials has surged from 233 to 338 in the last five years, indicating a sharp increase in wholesale prices.
- Florida Feels the Impact: Florida is experiencing similar trends. The RoMac Building Supply Whole House Commodity Index, a measure of the cost to build a home in Florida, was 5.1 percent higher in July 2025 than in July 2024. These increases are estimated to add approximately $10,000 to the price of a new home and are causing budget overruns in affordable housing projects.
- Widespread Material Inflation: Key materials have seen significant year-over-year price hikes. In the Southeast region, wood prices have increased by 8.2 percent, drywall/insulation by 6.2 percent, steel by 5.1 percent, and concrete by 4.7 percent between June 2024 and June 2025.
- Tariffs and Imports are Major Factors: The industry's reliance on imported materials, combined with significant tariffs—such as the 50 percent tariff on steel, aluminum, and copper—exacerbates cost issues. With domestic production struggling to meet demand, Florida remains vulnerable to global trade volatility.
- Uncertain Outlook: With the construction market remaining volatile, there is no immediate end in sight for high material costs. The lack of increased domestic production means that prices are likely to remain elevated, continuing to pressure the construction sector and the broader Florida economy.
This trend poses a direct threat to Florida’s growth and affordability. As material costs remain a top concern for nearly half of Florida's contractors, the impacts will continue to be felt in the housing market, transportation infrastructure development, and the state's ability to deliver crucial affordable housing.