Drennen Custom Contracting in Fort Collins is no stranger to price fluctuations in its materials. But lately, those costs are just going up and up.
“Instead of knowing, ‘Okay, what's going to be, two weeks of cost up, two weeks cost down,’ it's this continuous hill,” Operations Manager Rafe Quinton said. “And the question is like, ‘Well, where's the climax at? When does this end?’”
Quinton said they’re paying a lot more for the metal they use in roofing projects and that’s hitting their business.
“Even if you go with straight asphalt or with stone tiles, all of that still needs metal,” Quinton said. “So it's not like we have the choice to say, 'Oh, we just can't purchase that anymore.’ We just have to purchase it at the expense of our ultimate margin.”
Several construction projects in the state have been delayed or slowed due to increased tariffs and staffing shortages.
President Trump’s tariffs on steel and aluminum are having ripple effects in the state’s construction industry. The Bureau of Labor Statistics reports material costs have gone up by 20-40% since 2020. That’s raising overall project costs by 15-25%.
Quinton said it’s been challenging to stay competitive and keep prices low, but he’d rather not pass those additional costs onto customers. Even still, he’s seen a decrease in calls.
“I would certainly attribute that to the idea that, you know, people know that costs are going up,” Quinton said. “And so if they can wait, they will wait.”
Quinton also said they’re not hiring as many work crews for projects, with uncertainty about what their financial picture will be down the road.
“I would love to hire another one to two employees,” Quinton said. “But, but it's hard to know, like, if I hire you today, can I still pay two weeks from now? Can I still pay you four weeks from now?”
Quinton isn’t alone. Across the nation, 92% of construction companies say they’re having a hard time filling open positions, according to a recent report from the Associated General Contractors of America.
The organization’s Colorado division oversees hundreds of member contractors. Currently, 88% of them are saying they have labor shortages. That’s caused a domino effect of issues.
“It extends the project timeline, which costs the owners money,” President and CEO of AGC Colorado Jeff Barratt said. “(That), in turn, costs margins for construction companies which don't allow them to hire additional labor.”
Barratt said these shortages are ongoing, and there needs to be more of an investment into increasing base pay and fast-tracking training programs.
“It's economically vital to this state,” Barratt said. “You're sitting in a building that we built…and we need more workers to keep that growth, because there's a lot of projects.”
But the industry’s current workforce shortages have been impacted in part due to increased federal immigration enforcement. On the national level, 10% of workers have left or failed to show up due to actual or rumored ICE action. But immigrants make up around 21% of the construction workforce in Colorado.
“There's an air of uncertainty and fear. There's been ICE raids in the country," Barratt said. “I wouldn't say our members have really reported a lot of that, very small amount in Colorado, but when you look across the country, it's definitely happening.”
His organization has met with Colorado’s representatives in D.C. and pushed for more immigration reforms and temporary visa programs. It’s also created a resource center for contractors around immigration policy and what is needed from officers before anyone can access the private job site.
