Milwaukee ranked among the top U.S. cities for non-residential construction cost increases in early 2025, according to a new report by Minneapolis-based Mortenson Construction. The city saw costs rise by 2.58% in Q1 and 4.3% year-over-year, outpacing the national average and indicating heightened market pressure on developers and builders.

Nationally, non-residential construction costs climbed by 2.24% in the first quarter of 2025 and by 3.91% over the past 12 months, according to Mortenson's latest Construction Cost Index. The report tracks six metro areas—Milwaukee, Chicago, Minneapolis, Denver, Phoenix, and Seattle—and reveals that Milwaukee had the highest increase of all the cities monitored.

“Most trade partners report a cautious wait-and-see approach as vendors provide updated pricing guidance,” the report said, highlighting that uncertainty around pricing continues to affect budgeting and planning.

The steep uptick in costs is largely attributed to material price hikes, particularly in structural metals. The report noted a 3.8% year-over-year increase in construction material costs, led by:

• Structural steel and metal decking: up 6%
• Aluminum storefronts: up 4%
• Plumbing systems: up 3.5%
• Reinforcing steel material: up 3.5%

These increases are closely linked to recently enacted tariffs on imported steel and aluminum, which have disrupted pricing trends across the industry.

Despite these cost pressures, Mortenson’s report found supply chains to be largely stable, with “most regions reporting no major concerns for material availability.” Labor availability also remains relatively consistent, with “most trades reporting little concern,” suggesting that inflationary forces are being driven more by materials than workforce constraints.

Other cities saw comparable, though slightly lower, increases in non-residential costs for Q1 2025:

• Chicago: 2.55%
• Minneapolis: 2.52%
• Denver: 2.24%
• Portland: 2.19%
• Phoenix: 2.07%

These findings come as Milwaukee continues to attract major construction projects, many of which have featured Mortenson as a key contractor. The firm's influence in the city includes work on significant civic, healthcare, and sports infrastructure developments.

As Milwaukee builders contend with these elevated costs, the outlook for the rest of 2025 remains cautious. While steady labor and material availability offer some relief, pricing volatility—particularly tied to global trade and tariff policy—could continue to shape the region’s construction market.

For contractors, developers, and public sector project planners, these trends underscore the importance of proactive cost forecasting and supply chain risk management.

Originally reported by Alex Groth in Milwaukee Journal Sentinel.