Greater Orlando and the Gulf Coast from Tampa to Fort Myers have outperformed many U.S. regions in construction activity since 2020.
But if demand has outpaced much of the rest of the country, so too has execution risk — the possibility that a project will be harder, take longer and cost more than expected.
Higher material and labor costs, tightening insurance and bonding requirements and the ever-present realities of hurricane season are influencing how projects are priced, scheduled and managed.
Material pricing has stabilized compared to the volatility of 2021-2022, but elevated costs remain a defining challenge. Trends in the Cost of Construction Materials, released in September 2025 by the nonpartisan research institute Florida TaxWatch, reports that the cost of lumber and wood products rose 8.2% from June 2024 to June 2025 — far surpassing the national average increase of 4.8%.
Other commodity prices — including steel, concrete, drywall and insulation materials — have continued to increase but were generally the same or slightly below national averages. Together, these increases added more than $10,000 to the average cost of a new home in Florida, underscoring how incremental costs compound across a full build.
For nonresidential construction, the cost of construction materials and other inputs was up 1.5% year-over-year in June 2025, according to the second-quarter Construction Cost Report from the Florida Department of Transportation (FDOT). While that increase sounds modest, it’s on top of an already high starting point that has made it increasingly difficult for developers to design projects for profitability.
Even where year-over-year growth has moderated, contractors are still working from elevated baseline costs. Volatile fuel prices and tariff uncertainty add further risk when sourcing overseas materials, particularly steel, mechanical systems and specialty components.
Labor & Employment Pressures
Labor availability remains one of the most cited constraints across Florida construction markets. According to the FDOT, employment in heavy civil construction across Florida grew about 5.6% year-over-year as of June 2025, reflecting continued strength in infrastructure, transportation and public works spending.
At the same time, the 2025 Florida Outlook survey from Associated General Contractors of America (AGC) found that a majority of firms expected increased project opportunities, and roughly 80% anticipated that hiring qualified craft labor would become more difficult.
As a result, labor shortages are contributing to wage inflation, higher overtime costs and schedule risk — particularly in skilled trades. At the jobsite, it means contractors are often forced to sequence work around labor availability rather than ideal construction flow — increasing inefficiency and coordination challenges.
Insurance & Risk Management
The chaos of Florida’s various insurance sectors seems to be clearing, but costs remain high and availability hasn’t returned to pre-2020 norms.
The upshot is that even where base policy rates hold steady or decline slightly, total cost is rising to cover the typical range of risks in a new development. In their own planning, builders and contractors must account for growing exposure to storms, supply-chain interruptions and schedule delays that can quickly erode profitability.
Weather & Hurricane Season
Weather risk is not theoretical here; it directly shapes project planning. Active hurricane seasons, intense rain events and prolonged heat affect everything from site access to material deliveries to workforce productivity.
Storm-related shutdowns, extra inspections and supply diversions are routine after major weather events. Many projects now require tighter scheduling, accelerated envelope work ahead of storm season and expanded allowances for weather-related delays.
Impacts on Project Execution
Taken together, the combined pressures of material cost, labor, insurance and weather risk are reshaping how projects are executed.
Project timing: Material lead-time uncertainty and labor constraints are lengthening project schedules. Some contractors are delaying starts until key materials are secured or price-locked. Others are fast-tracking early phases — particularly building-envelope work — to reach dry-in before peak storm season.
Contingency planning: Many firms now budget 5-10% or more to cover material escalation, overtime labor and weather-related rework. Contracts increasingly include cost-escalation clauses, force-majeure provisions and clearer responsibility for delay impacts.
Subcontractor risk: Subcontractors face tighter margins and higher working-capital requirements. Prolonged delays caused by storms or material shortages can strain cash flow, particularly for smaller firms. Insurance deductibles tied to storm damage and extended general conditions further increase exposure. Suppliers, in turn, must manage lead-time volatility and logistics disruptions tied to regional weather events.
The big picture is that Florida’s construction economy remains fundamentally strong, but is increasingly complex to navigate. For builders and contractors in the region, success now depends on proactive risk management — locking in materials early, coordinating closely with suppliers, maintaining flexible schedules and building financial buffers that account for both cost volatility and weather uncertainty.
In an area where demand remains steady but execution risk is rising, disciplined planning and strong supply-chain partnerships are now as important as winning the next bid.
With locations in Orlando, Tampa, Sarasota and Fort Myers, Best Supply can help manage your risk. Known for on-time delivery, white-glove material shakeout, expert takeoff assistance and competitive prices. Call or request a quote for your next job.