Navigating a tariff-defined market

By Emma Peterson.

Learn about the challenges and opportunities tariffs present to the building and construction industries.

Speakers Bureau is one of RoofersCoffeeShops®'s newer initiatives. It aims to connect professional speakers and experts in the industry to events and opportunities. RoofersCoffeeShop President Heidi J. Ellsworth explained a bit about the inspiration for this Bureau, saying, “We are regularly asked if we know good speakers for association and company events, continuing education and trainings. The RCS Speakers Bureau highlights exceptional speakers in a directory format offering insights into their past experience and overall roofing industry knowledge."

One such member of the Speakers Bureau is Paul Tombitas. Paul is a partner in FMI Consulting’s strategy practice and leads their building products sector team. In his 10 plus years with FMI, he has worked with clients to develop everything from market strategy to customer-first company cultures. Recently, he published a timely article about tariffs and the implications they have on the building and construction industries.

If you haven’t heard yet, there are new enacted tariffs on Canada and China. Most pressing to our industry are the 25% tariffs on materials like steel and aluminum. These tariffs create both challenges and opportunities for companies. Paul’s fellow FMI Partner Jay Bowman explained, “Project pipelines may slow, and firms will need to adopt strategic countermeasures to navigate this volatile environment. However, these challenges also present opportunities for firms that can adapt their procurement strategies, hedge against risk and position themselves as trusted advisors to clients.”

In the domestic market, manufacturers should look into leveraging domestic supply chains. Because tariffs make imported materials and products more expensive, those that capitalize on domestic options can capitalize on pricing gains and reduced international competition. Those with international facilities should also consider reshoring their operations and/or strategically adjusting pricing to offset increased costs.  

For foreign manufacturers, tariffs provide far more threats than opportunities. Paul writes, “Higher costs make their products less competitive against domestic alternatives, forcing companies to absorb price increases, pass costs to customers or explore alternative operations.” Overall, we can expect to see a rise in cost for foreign materials. Using the example of steel and aluminum, there are prediction of U.S. prices increasing by 8.2% and 5.7% respectively. Ultimately, there are two main paths that foreign manufacturers will take, invest in establishing production facilities in the U.S. (Recticel Group is an example of this) or shift their interests away from the U.S. market to other nations.

To learn more about pricing volatility, market shifts, growth opportunities and more, read Paul’s full article!