Procurement Market Update
Q1 2026
SHIFTING MARKET DYNAMICS AUTHORS David Hamilton
Doug Allen
SVP, Construction Procurement Solutions
Manager, Strategic Growth & Corporate Development, STO Building Group
The construction market in early 2026 was already being shaped by four compounding forces: a historic copper supply deficit, tariff-driven cost pressure on steel and MEP equipment, extended electrical and HVAC lead times, and growing subcontractor financial stress. The US-Israeli military conflict with Iran that began in late February has added a fifth: a disruption of the Strait of Hormuz, through which roughly 20% of the world's seaborne oil, significant aluminum production, and critical LNG exports normally flow. The result is a simultaneous disruption to energy prices, freight costs, and key material supply chains, compounding pressures that were already elevated. We have been actively monitoring conditions across our manufacturer and supplier network since the conflict began. The picture is evolving quickly. .