PORTLAND, Ore. — Homebuyers and those planning renovations can expect construction prices to rise significantly. The construction industry is grappling with higher material costs driven by tariffs, while workforce shortages, exacerbated by immigration crackdowns, are making matters worse.

“Construction is really in the crosshairs here,” said Ken Simonson, the chief economist for the Associated General Contractors of America. He explained that construction is particularly vulnerable to tariffs because the industry imports large quantities of materials, including lumber (especially in the Northwest), steel, copper, appliances, lighting, and other fixtures.

Local construction companies in Oregon told KGW that they are still trying to manage the balance between escalating prices and existing contracts. In addition to rising material costs, they are also facing increased overtime expenses, as many immigrant workers—regardless of their legal status—are avoiding worksites due to concerns about Immigration and Customs Enforcement (ICE) raids.

“If you don’t have the workers, the project is going to take longer, and you’re going to be paying more overtime for the workers you do have,” Simonson stated, emphasizing the impact of these labor shortages on timelines and budgets.

Smaller construction companies, especially those represented by the Oregon chapter of the National Association of Minority Contractors (NAMC), are finding themselves caught in a bind. They are dealing with a surge in legal concerns from workers who are fearful for their families’ safety. These smaller firms are also competing against larger companies that have the financial resources to stockpile building materials ahead of anticipated price hikes from tariffs.

“We already don’t spend very well in Oregon with small businesses of color,” said Nate McCoy, the executive director of NAMC. “So these kind of policies, the tariffs and even immigration, are absolutely hurting our city of Portland and our whole state.”

Many workers who have spent years in the construction industry and have proper documentation are still wary about the possibility of ICE raids. As McCoy explained, the uncertainty surrounding their safety often drives them to leave worksites when news of raids spreads.

“It doesn’t feel welcoming in the U.S. anymore,” McCoy said. “It feels like we’d much rather people, even those who’ve contributed, to go back to their own country.”

He added, “That’s just shameful since we are the United States of America, not the 'Divided State of America.'”

As construction prices rise due to tariffs and the uncertainty surrounding the immigration policies, the industry is caught in a dilemma that threatens both labor and material availability. The long-term effects of these policies could change the landscape of construction, particularly for smaller, minority-owned businesses.

Originally reported by Libby Dowsett in KGW 8.