Summer 2026 Supply Chain

Supply Chain Analysis

Fuels and Natural Gas

Structural Steel Inputs

Piping

HVAC Equipment

Generators

Electrical Gear

Metals

Concrete and Cement

Insulation

Gypsum and Metal Studs

Lumber and Wood

Supply Chain Analysis

Construction supply chains continue to face challenges. The ongoing conflict in Iran and the ever changing status of the Strait of Hormuz, are wreaking havoc on global oil pricing. Volatile pricing continues to plague both transportation and material costs for oil-based products such as roofing, waterproofing, rigid insulation and PVC pipe. In addition, tariffs have placed upward pressure on the cost of key metals; steel, copper and aluminum are all trading at or near all-time highs. New tariffs on Canadian goods will also affect lumber and cement costs in the U.S.

Lead times have improved for some electrical and mechanical equipment as capacity investments have helped to meet elevated demand. However, the structural steel market is experiencing unprecedented demand from data centers and large industrial and manufacturing projects. Lead times for steel packages are now hovering between 40–50 weeks, although this varies by region. Projects with close proximity to large data center campuses are experiencing the longest lead times.

Steel Lead Times

Fuels and Natural Gas

Lead Time

Price

Current

6–12 Month Forecast

Despite improving from the peaks seen earlier this spring, fuel prices remain significantly higher compared to the same time last year. U.S. regular unleaded gasoline averaged approximately $3.13/gallon in July 2025. That increased to roughly $4.50/gallon three months ago amidst Middle East supply disruptions and is currently near $4.00/gallon. Diesel fuel trends have been similar. Natural gas prices are also higher than a year ago, supported by strong LNG export demand and power generation consumption. For construction, elevated fuel costs continue to increase the cost of operating heavy equipment and transporting materials and equipment, while higher petroleum and natural gas costs have contributed to price pressure on asphalt, roofing products, insulation, PVC, plastics, coatings and other petrochemical-based materials.

Source: U.S. Energy Information Administration, July 2026

Structural Steel Inputs

Lead Time

Price

Current

6–12 Month Forecast

Structural steel demand remains elevated, largely as a result of the unprecedented market for data centers and large factory projects. Section 232 tariffs, now extended to derivative products, have driven more steel manufacturing on-shore, impacting domestic production capacity and pricing. Demand is only expected to rise further, with additional large factory construction projects on the horizon.

Source: Steel Benchmarker, July 2026

Piping

Lead Time

Price

Current

6–12 Month Forecast

PVC: The conflict in Iran and blockade of the Strait of Hormuz has impacted 20 percent of global oil supply, causing PVC prices to increase marginally.

Copper: Copper pricing continues to rise given the derivative tariff impacts and the significant growth in the high-tech sector.

Carbon Steel: Carbon steel pipe prices have leveled out over the past quarter.*

*Since Q1, our carbon steel sources have been unavailable. We are assessing alternative options to support future reports.

Source: U.S. Bureau of Labor and Statistics Producer Price Index, June 2026; Carbon Steel*

HVAC Equipment

Lead Time

Price

Current

6–12 Month Forecast

Lead times for HVAC equipment continue to rise, especially for rooftop units (RTUs), driven by strong market demand. Lead times for other major HVAC equipment also remain elevated, in some cases reaching up to 52 weeks, due to continued demand from data center and semiconductor projects.

In light of the expanded Section 232 tariffs on derivative products, we have revised the 2026 price escalation forecast from 8–10 percent to 10–12 percent, depending on the manufacturer. It should be noted that this projected increase primarily applies to larger HVAC equipment categories that are experiencing the greatest demand and supply chain constraints. This forecast exceeds the broader HVAC and Commercial Refrigeration Equipment Producer Price Index (PPI), which has increased only 3.5 percent over the past 12 months, indicating that pricing pressure for large-scale equipment is significantly higher than the industry-wide average reflected in the PPI.

Source: FRED, June 2026

Generators

Lead Time

Price

Current

6–12 Month Forecast

Demand for data center generator sets continues to impact the market for units 2 MW and larger, with demand for these higher-capacity generators filling much of the available manufacturing capacity for the next two years. Current lead times are approximately 35–40 weeks for generators ranging from 250 kW to 1 MW and 18–30 weeks for units below 350 kW, although lead times vary by manufacturer and project-specific requirements. Prices in 2026 are expected to increase by 8–10 percent for larger generators in the 100 kW to 4.5 MW range due to sustained demand and capacity constraints. This anticipated increase contrasts with the Motor and Generator Manufacturing Producer Price Index (PPI), which reflects only a 1.7 percent price increase over the past 12 months, suggesting that market conditions for larger power-generation equipment are significantly outpacing broader industry pricing trends.

Source: FRED, June 2026

Electrical Gear

Lead Time

Price

Current

6–12 Month Forecast

Lead times for electrical gear have been consistent since last quarter. Switchgear and pad-mounted, liquid-filled transformers are currently running between 60–100 weeks. Prices in 2026 are expected to rise 8–10 percent due to strong demand, tariffs and metal price increases.

Source: FRED, June 2026

Metals

Lead Time

Price

Current

6–12 Month Forecast

Metals pricing continues to rise in nearly all categories. Aluminum pricing had dropped with the ceasefire in the Middle East, but began rising again as fighting resumed and traffic through the Strait of Hormuz has once again come to a halt. Although nickel is not impacted by shipping through the Strait of Hormuz, pricing is rising due to shipping disruptions out of Indonesia, which is the world’s largest nickel producer.

Source: Kitco, July 2026

Concrete and Cement

Lead Time

Price

Current

6–12 Month Forecast

Concrete pricing continues to rise, however, because of the local nature of concrete, pricing escalation is not being felt equally in all markets. Cost escalation is driven mainly by rising costs for energy, transportation and raw materials like cement, gypsum and limestone.

Source: Engineering News-Record, June 2026 and U.S. Bureau of Labor and Statistics Producer Price Index, June 2026

Insulation

Lead Time

Price

Current

6–12 Month Forecast

Insulation pricing is rising, with polyiso insulation board experiencing the steepest escalation because of its dependence on petroleum. Major polyiso insulation manufacturers in this market have announced 5–8-percent price increases, which is in addition to the 6–12-percent increases that were announced earlier this year.

Source: U.S. Bureau of Labor and Statistics, July 2026

Gypsum and Metal Studs

Lead Time

Price

Current

6–12 Month Forecast

Major drywall manufacturers have announced price increases due to rising costs of materials, energy and transportation. However, low residential construction demand will help to minimize actual cost impacts. In response to continued upward movement in the coiled steel market, major steel stud manufacturers have announced price increases in June and August.

Source: Engineering News-Record, July 2026 and U.S. Bureau of Labor and Statistics and Producer Price Index, Drywall and Gypsum, June 2026

Lumber and Wood

Lead Time

Price

Current

6–12 Month Forecast

Lumber pricing has risen to its highest level in four years, largely as a result of constrained supply. Previously low prices, combined with tariffs on Canadian imports, resulted in curtailments and lumber mill closures that have driven down supply despite weak housing demand. However, futures are trading lower, which indicates that pricing may be heading towards decline in the coming months.

Source: Engineering News-Record, July 2026 and U.S. Bureau of Labor and Statistics and Producer Price Index, June 2026

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Summer 2026 Supply Chain

Supply Chain Analysis

Supply chains challenges are in the spotlight again

Steel Lead Times

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