How New Tariffs Are Driving Up Construction Costs on Long Island (And What Builders Are Doing About It)

How New Tariffs Are Driving Up Construction Costs on Long Island (And What Builders Are Doing About It)

If you’re planning a commercial build or gearing up to break ground on a new development, there’s a fresh wrinkle in the budget — construction materials just got more expensive, and it's largely thanks to a wave of new federal tariffs.

From steel beams to copper wiring, the essentials are now coming with a premium, and Long Island’s builders are feeling the squeeze.

The Cost Surge: What the Numbers Are Telling Us

According to the Associated General Contractors of America (AGCA), the Producer Price Index (PPI) for materials and services used in nonresidential construction jumped 0.5% in July, and is up 2.6% from July 2024 — the largest 12-month spike since early 2023.

Here’s what’s fueling that rise:

• Aluminum mill products are up 13.7% year-over-year

• Steel mill products have increased 8.8%

• Copper and brass shapes have climbed 6.9%

Why? It all ties back to tariffs. On July 4, tariffs on steel and aluminum doubled to 50%, and a new 50% tariff on raw copper kicked in on August 1. And as of early August, most imports from key material-supplying countries are now facing additional tariffs as well.

How It's Playing Out Across Long Island

While this is a national issue, Long Island construction firms are experiencing it firsthand.

Projects Canceled. Margins Squeezed.

Alex Lipsky, president of Lipsky Construction in Bayport, says the price hikes aren’t a surprise — but that doesn’t make them easier to deal with.

“We’re feeling it today, but it’s been coming,” Lipsky told LIBN. “They increased it over time over the past year, but it is impacting. We found out from a developer yesterday that they’re canceling their project, which is in response.”

Even with prices rising, profit margins aren’t. To adapt, Lipsky’s team is shifting toward sourcing more domestic materials — where pricing is at least more stable, if not dramatically cheaper.

“That price is stable and we don’t have to worry about where that price is going,” he said.

Big Players Are Leveraging Scale

For larger firms like Aurora Contractors in Ronkonkoma, strong purchasing power is helping offset the impact.

“With our purchasing power in excess of $350 million annually, and the current slowdown in construction activity, we’ve been able to leverage competitive pricing to offset the impact of tariffs,” said company president Anthony Vero.

Translation: bulk buying and fewer active projects have created a silver lining — for now.

Global Suppliers Are Absorbing the Blow… Temporarily

Devin Kulka, CEO of Kulka Group in Hauppauge, noted that international suppliers are absorbing some of the costs — for now.

“The concern is, if suppliers begin to view these tariffs as long-term, they may stop absorbing those costs, potentially leading to even higher prices.”

That’s the risk many developers are weighing: delay and hope tariffs ease, or build now before prices rise again?

Domestic Prices Climbing Too

Even though most contractors aren’t importing materials directly, the tariffs are pushing domestic producers to raise prices in line with the protection those tariffs provide.

“It is clear that domestic producers are raising prices in line with the protection tariffs are providing them,” said Ken Simonson, AGCA’s chief economist.

So, even if you’re buying American, you’re still paying more.

What Does This Mean for Your Project?

Whether you’re building a multi-use development in Suffolk or a commercial center in Nassau, these rising costs matter. Margins are shrinking, some projects are on pause, and budgets are being reworked.

But it’s not all doom and gloom.

Contractors who act fast — by locking in prices, reassessing materials, or partnering with firms that can scale — are finding ways to stay on track.

Final Take: Building Smarter in a Pricey Market

If you're involved in construction or development on Long Island, here's what you should consider:

• Reevaluate your project timeline — costs could rise further this year

• Explore domestic suppliers with stable pricing

• Partner with firms that can leverage scale or volume

• Consider design flexibility to adapt to material costs

This is the new reality for now — but smart planning and the right partnerships can still move projects forward, even in a turbulent market.

Stay tuned. This is a story that’s still unfolding, and we’ll be covering every major shift affecting Long Island’s construction landscape.

Tags:

Long Island construction, construction costs 2025, steel price increase, aluminum tariffs, copper price rise, AGCA report, building material inflation, Long Island development, commercial construction NY, Producer Price Index 2025