Increases in construction materials costs, especially for steel, have some in the San Diego building industry wondering whether the city's building boom will continue, according to www.constructiondive.com.
Steel prices are up 31 percent from the beginning of the year, largely resulting from the implementation of President Trump's 25 percent tariff on imported steel. Aluminum prices experienced a brief jump but have settled near January 2018 levels despite a 10 percent tariff. Developers are continuing work on major downtown projects despite pricing issues that could total millions in additional costs; however, some developers could reconsider future projects if material prices do not stabilize.
There are additional factors that could affect project development in downtown San Diego, including a shortage of skilled workers, the cost of prevailing wage workers, a slowdown in apartment rental rate growth and an increase in prices for materials such as lumber, which also is subject to tariffs. However, current construction projects are keeping the city's industry busy.
Builders and developers in most major metros currently experiencing a construction boom likely have similar concerns as those in San Diego as they face a persistent labor shortage.