Tuesday, June 9, 2026

Executive snapshot

• Positive Earthwork/sitework cost relief: Diesel at $5.350/gal (June 1) is down 3.1% w/w — the fourth straight weekly decline. For large pad grading and site-prep scopes, fuel remains 15–25% of unit cost; lock in current fuel pricing where possible before reversal. FRED (GASDESW)
• Cautious Section 232 now in effect (June 8): Construction and mobile equipment added to new Annex I-C, with a tiered 15–25% duty structure. The 85% domestic-content threshold (down from 95%) expands who can qualify for U.S.-origin exemptions — verify supplier certifications now. White House Proclamation (June 1, 2026)
• Neutral Phoenix industrial spotlight: Vacancy 11.4% with 21.4 MSF under construction (CoStar Q1 2026). Rent growth at +4.2% YoY with asking rents at $13.02/SF. A $3B data center campus just broke ground in Avondale — steel cost and power availability are the two dominant bid-day risk factors for Phoenix GCs. Matthews Phoenix Industrial Q1 2026
• Cautious Data-center power constraint: U.S. demand surged from 23 GW (2023) to 42 GW (2026); transformer lead times stretch 80–120 weeks. Construction costs rising at 7% annually; transformers/switchgear up 30% since 2019. 30% of planned U.S. capacity shifting to bring-your-own-power strategies. iRecruit Data Center Power & Energy Report 2026
• Cautious ABI signals persistent pipeline softness: April billings 48.3 (from 49.8 in March); has not crossed 50 since January 2023. Commercial/industrial most affected; institutional and multifamily show modest growth. Inquiries rose for 3rd consecutive month — a potential leading indicator. AIA/Deltek ABI April 2026
• Positive Multifamily construction rebound: April starts surged to 529k SAAR (+14.3% m/m, +23.3% YoY). Supply wave is peaking — REIT leaders confirm absorption outpacing supply in multiple markets; rent recovery expected post-2026 as pipeline depletes. Multifamily Dive / HUD-Census April 2026
• Cautious Steel and lumber cost double-pressure: HRC PPI +4.1% m/m and lumber PPI +3.4% m/m in April; nonresidential input costs ran at a 12.6% annualized rate through Feb 2026. Structural steel, rebar, and fabricated steel on active bids need fresh pricing — no assumption of reversal. FRED (WPS101704/WPU081) / ABC / Westside Construction Group

Market movers

Sector outlooks

Strategic watchlist

• Phoenix steel exposure: Hot-rolled steel PPI +4.1% m/m in April plus Section 232 effective June 8 — Phoenix industrial shell and data center GMP bids using steel quoted before June 1 need immediate repricing. Fabricated steel and rebar premiums are accelerating. FRED (WPS101704) / ABC Carolinas
• Section 232 supplier certification: New 85% domestic-content threshold (down from 95%) expands eligibility for U.S.-origin rate — but only with valid paperwork. Map all steel/aluminum/copper derivative products across active bids and confirm origin certs before purchase orders. White House Proclamation / Holland & Knight
• Data-center power procurement: Transformer lead times 80–120 weeks; switchgear ~52 weeks. Any Phoenix-area or frontier-market DC project without confirmed utility interconnection or on-site power commitment is pricing a schedule it cannot deliver. iRecruit Data Center Power 2026 / ABC Carolinas
• July 24, 2026 tariff cliff: Section 122 (broad 10% blanket import tariff) expires July 24. Section 301 replacements take effect with country/product-specific rates. Lock in material pricing on active backlog before this date — do not assume costs will drop post-expiration. ABC Carolinas / Westside Construction Group

Top questions leaders should be asking

• Which active Phoenix-area bids include structural steel or rebar — and have we repriced since the Section 232 June 8 implementation against the new 85% domestic-content threshold?
• On earthwork/sitework scopes, are we capturing the diesel decline ($5.35/gal, -3.1% w/w) in current unit prices, or are we carrying stale fuel assumptions from March–April?
• For any data-center pursuits in Phoenix or frontier markets: have we confirmed utility interconnection and transformer procurement commitments, or are we pricing a schedule we cannot deliver?
• Does the ABI staying below 50 (persistent multi-year trend) show up in our 6–12 month commercial design pipeline — and should we pivot marketing effort toward public/infrastructure and multifamily?
• With Section 122 expiring July 24 and Section 301 replacing it, have we stress-tested our active backlog margin against the new country/product-specific tariff map — especially for switchgear, specialty cable, and electrical components?