What happened
Construction costs have reached record highs, according to El Confidencial. In 2025, direct construction costs rose 5.46%, consolidating an upward trend since late 2024. This increase is due to several factors, such as the shortage of skilled labor and the rising price of key materials.
The Direct Construction Cost Index, compiled by ACR, stands at 185.42 points, a new record. This rise directly affects the final price of properties, since direct costs account for roughly 80% of a project's total cost.
The situation is made worse by the shortage of build-ready land and slow administrative handling of permits, which makes access to housing even harder. In addition, the upward trend is expected to continue in 2026, amid market volatility and geopolitical tensions.
Why it matters to a construction company
This cost increase directly affects construction companies, especially small and mid-sized ones. Pressure on material and labor prices forces them to revise budgets and delivery schedules, which can jeopardize the viability of some projects.
The market context is difficult: housing demand remains high, but supply cannot keep pace because of high costs and the lack of skilled staff. This creates a gap between supply and demand that worsens the housing access problem.
Construction companies must adapt to this challenging environment, looking for new ways of operating that let them stay competitive. Industrialized construction is emerging as a viable option for reducing costs and timelines, although it requires an upfront investment and a change in traditional processes.
What changes in day-to-day site operations
Rising construction costs force construction companies to rethink their workflows. Managing budgets and purchasing becomes more complex, since material prices can vary significantly in a short time.
Quantity takeoffs and payment certificates are also affected, since any cost deviation can have a considerable impact on the profit margin. It is crucial to have tools that allow every line item to be tracked down to the cent.
Site managers are the first to notice these changes, since they must adjust schedules and resources according to the availability of materials and staff. Open communication with suppliers and subcontractors becomes essential to avoid delays and cost overruns.
Specific cases
Imagine a construction company starting a residential project in 2026. With material and labor costs rising, it must adjust its initial budget so as not to compromise profitability. This could mean renegotiating contracts with suppliers or looking for cheaper alternatives.
Some companies are adopting industrialized construction in response to these challenges. This approach reduces the need for on-site staff and shortens execution times, which can be crucial in an environment of high uncertainty.
For industrialized construction to work, you need a trained team willing to adopt new technologies. Detailed planning and efficient coordination among all parties involved in the project are also required.
Data and context
According to El Confidencial, construction costs rose 5.46% in 2025, reaching an index of 185.42 points. This increase is mainly due to the shortage of skilled labor and the rising price of materials such as rebar.
This trend takes place amid market volatility and geopolitical tensions, which affect the availability and prices of raw materials. In addition, housing demand remains high, which increases the pressure on construction companies to deliver more units in less time.
However, the data does not fully capture the impact of these increases on small and mid-sized construction companies, which may have greater difficulty adapting to this changing environment. It is crucial to consider these factors when planning new projects.
Risks and limits
The main risk associated with rising costs is the possible unviability of some projects, especially for small construction companies. Profit margins can shrink significantly if costs and schedules are not managed properly.
In some cases, industrialized construction may not pay off, especially if the company is not ready for the change or if the projects are not suited to this approach. The upfront investment and the learning curve can be significant barriers.
There are also organizational risks associated with adopting new technologies and construction methods. It is crucial to have a trained team committed to change in order to minimize these risks and make the most of the opportunities that industrialization offers.
What a company can do now
Construction companies can take concrete steps to adapt to this challenging environment. One option is to explore industrialized construction, evaluating its viability for current and future projects. Another is to optimize purchasing and budget management to mitigate the impact of price fluctuations.
When making decisions, it is important to consider factors such as the availability of skilled staff, access to suitable technologies, and the company's ability to adapt. A detailed analysis of these aspects can help identify the best opportunities for improvement.
The realistic next step is to join free pilots with solutions such as Bloqbase, which allow companies in the sector to experiment with new ways of managing their projects without committing to a significant upfront investment.
Sources
El Confidencial: https://www.elconfidencial.com/inmobiliario/residencial/2026-02-26/acr-construccion-industrializada-costes-de-construccion-mano-de-obra-materiales_4308988/