➤ Key Highlights
The Section 122 tariff framework is set to expire July 24, 2026.
Tariffs add roughly 6% to materials costs versus a 2024 baseline.
Total project costs are running about 3% higher; inputs sit ~44% above 2020.
Steel, aluminum, and some copper tariffs reach as high as 50% in bids.
Backlogs split: 10.9 months for data-center/manufacturing contractors, 5.8 for small firms.
➤ The Signal
A fixed expiration date converts tariff risk from background noise to a live variable.
Bids and GMPs priced past July 24 carry unhedged cliff exposure.
The cost market is bifurcating by sector, not moving as one.
Tariff exposure has been a vague drag on construction costs for two years. The July 24 expiration changes its character: it gives the risk a date. Any guaranteed-maximum-price or backlog priced to extend beyond that day is exposed to a step-change — up if extended or escalated, potentially down if it lapses — that most contingency lines weren’t built to absorb.
The exposure is concentrated where it bites hardest. Steel, aluminum, and copper carry the steepest tariffs, so structure- and electrical-heavy projects — including the data centers and plants driving today’s pipeline — feel it most.
The backlog data shows a split market underneath. Contractors tied to data centers and advanced manufacturing are nearly fully booked; smaller firms are running thin. Cost risk and pricing power are diverging by who you build for.
➤ Implications
Owners should pressure-test GMP and contingency assumptions against the July 24 date and lock material pricing where possible. The sectors with the longest backlogs also carry the most tariff-sensitive scopes — strong demand and cost risk are stacked on the same projects.
➤ Key Takeaway
Tariff risk just got a calendar date — and every bid that crosses it needs to be re-underwritten before, not after.
Source: ENR / AGC / Cushman & Wakefield — June 2026
