Building in Uncertain Times: How Skilled Contractors Hedge the Risks of Rising Material Costs

In Ontario’s construction industry, one thing is certain: volatility is here to stay.

From record-breaking price increases in core materials like lumber and steel to global trade policies that shift overnight, building in 2025 is not for the faint of heart. With tariffs, supply chain challenges, and inflation hitting at once, the cost to build — and the risk of going over budget — has never been higher.

But this is exactly where experienced general contractors and project managers prove their value.

At Imperio Construction, we’ve navigated fluctuating markets before, but today’s environment demands more than just good craftsmanship. It requires foresight, planning, strategic procurement, and, most of all, clear communication with clients. With the right expertise, even in a turbulent market, building can still be done confidently — and successfully.

In a recent interview with Juan Zapata, the CEO of Imperio Construciton, Juan explained how market volatility can have adverse affects on a wide range of construction projects, particularly if they are not managed by an experienced and diligent project manager. Juan explained how planning is more important than ever, from the financing all the way to the final details.

The Numbers Behind the Volatility

Material costs have surged dramatically since 2020 — and they’re still climbing:

• Lumber prices recently spiked to $658 per thousand board feet, the highest in more than two years, as reported by Toronto CityNews.

• Steel and aluminum tariffs imposed by the U.S. have reached 25%, with Canadian softwood lumber facing a combined duty of nearly 40% according to Reuters.

• Drywall costs are also on the rise, with manufacturers announcing 20%+ price hikes for 2025 (Dharam Consulting).

• Since December 2020, construction material costs are up 34%, with forecasts predicting an additional 4–6% increase within the next year (Real Estate News).

These aren't just numbers on paper — they directly impact homeowners and developers. For example, the cost to build a single-family home has risen by $30,000–$50,000 over the past year alone, according to The Real Estate Insider.

How This Affects Construction Projects in Ontario

Uncertainty around pricing leads to a domino effect:

• Renovation budgets are harder to lock in — fueled by constantly changing trade negotiations

• Project timelines are slipping as contractors and homeowners delay starts, hoping for price stabilization.

• Developers are putting land deals on hold, unsure how to price homes for sale a year out.

• Small contractors and suppliers are squeezed, unable to absorb cost increases or stockpile inventory in advance.

In this climate, clients face serious risk if their contractor isn’t equipped to manage volatility.

Our Approach: Managing Risk, Protecting Budgets

Here’s where experienced construction management becomes more than just helpful — it’s mission-critical.

At Imperio Construction, we take a proactive, strategic approach to cost and risk management:

🔧 1. Smart Procurement and Supplier Relationships

We maintain strong partnerships with trusted vendors, allowing us to:

• Lock in prices early where possible.

• Source quality alternatives when tariffs impact availability.

• Avoid last-minute price shocks through reliable forecasting.

This network proved crucial when drywall costs surged. By planning ahead and working closely with our suppliers, we helped clients avoid delays and keep budgets intact.

📄 2. Clear Contracts with Escalation Clauses

We incorporate escalation clauses in our agreements — a tool that allows for price flexibility when material costs shift beyond normal thresholds.

This protects both the homeowner and the contractor. It means no hidden surprises — just honest, transparent planning.

"Our project came in on budget and ahead of schedule, and there were no surprises."— Dan Holstein, a homeowner in Beamsville

📊 3. Detailed Planning and Weekly Progress Reports

Uncertainty doesn’t mean chaos — at least not when projects are well managed. We provide:

• Weekly updates outlining progress, next steps, and material status.

• Forecasts that account for real-world price trends and global factors.

• A contingency-focused approach that keeps projects moving even when surprises arise.

“We had weekly update and status reports that kept us in the loop in terms of progress to date, materials arriving, next steps, and intended progress for the upcoming week.”— Dan Holstein, Imperio client

🧠 4. Technical Expertise and Engineering Insight

Led by civil engineer Juan Zapata, Imperio brings large-scale infrastructure knowledge into every residential or commercial project.

“We chose Imperio because of Juan’s extensive experience in large engineering projects. Their technical knowledge and management skills were key in keeping our custom home on schedule, even with material shortages.”— Hermann Rivadeneira, custom home client

What Homeowners & Developers Can Do in 2025

While the market remains uncertain, you’re not powerless. Here’s what we recommend:

✅ Prioritize experience. Not all contractors are equipped to handle volatile conditions. Look for a team that demonstrates risk planning, supplier strategy, and financial transparency.

✅ Plan with flexibility. Be open to alternatives. Whether it’s tile from Europe instead of the U.S., or engineered wood in place of solid oak, small shifts can mean big savings.

✅ Insist on clear, flexible contracts. Escalation clauses, contingency plans, and project reporting should be standard — not optional.

✅ Stay informed. With trade tensions evolving weekly, working with a contractor who monitors trends and reacts quickly is your best defense.

Building with Confidence — Even in a Shifting Market

The construction industry may be in flux, but your project doesn’t have to be. With the right general contractor and project manager at the helm, the path forward is still clear.

At Imperio Construction, we’re not just builders — we’re planners, communicators, and advocates for your vision. Our team thrives under pressure because we know how to manage it, protect your budget, and still deliver an exceptional outcome.

So whether you’re starting a basement renovation, building a custom home, or developing a new multi-unit property, know this:

Volatility is temporary. Good construction management is timeless.

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Frequently Asked Questions

Q1: How are skilled contractors mitigating the risks of rising material costs?

A1: Skilled contractors employ strategies such as bulk purchasing materials in advance, negotiating long-term contracts with suppliers, and sourcing alternative materials to hedge against price volatility.

Q2: What impact do tariffs have on construction material costs?

A2: Tariffs can significantly increase the cost of imported construction materials, leading contractors to seek domestic alternatives or adjust project budgets accordingly.

Q3: Are there alternative materials that contractors are using to reduce costs?

A3: Yes, contractors may substitute traditional materials with cost-effective alternatives that meet project specifications without compromising quality.

Q4: How does early procurement help in managing material cost fluctuations?

A4: Early procurement allows contractors to lock in current prices, reducing exposure to future price increases and ensuring material availability.