What Rising Construction Material Costs Mean for Your 2026 Bids
Steel prices up 18-25%, aluminum up 12-18%, lumber swinging 10-15%.
Why Your 2025 Markup Formula Is Losing You Money
A smarter markup structure uses tiered pricing: commodity materials (25-35% markup), specialty items (15-20%), labor separate.
Price Escalation Clauses
Sample language: Material pricing is based on costs as of a specific date. If material costs increase by more than 5% prior to purchase, the contract price will be adjusted to reflect actual costs, with documentation provided.
How to Lock In Pricing Without Killing Cash Flow
Negotiate supplier deposit terms (10-25% deposit to lock pricing) and include material deposit language in client contracts.
Weekly Tracking
- Budgeted vs. Actual Committed Cost
- Per-Unit Commodity Costs
- Pending Change Orders
Real Example: $250K Commercial Job
Without planning: $6,720 in overages (one-third of profit). With proper planning: escalation clauses, deposits, and sub terms protect most of your margin.
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