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Industry News6 min read

What Rising Material Costs in 2026 Mean for Your Bottom Line

Rising material costs in 2026 are squeezing construction margins harder than ever, but the real danger is not the price hike itself—it is not knowing how those increases ripple through your job costing, cash flow, and profitability.

Cory Salisbury
Cory Salisbury
Founder & Fractional CFO • Salisbury Bookkeeping

Why Material Cost Increases Hit Construction Harder Than Other Industries

You are locked into fixed-price contracts signed months ago. A 15% material cost increase on a $350,000 remodel can vaporize $8,000-$12,000 in profit.

What Does Real-Time Job Costing Actually Mean?

  • Integrated project management with QuickBooks
  • Live budget vs. actual tracking
  • Custom dashboards with auto-updating KPIs
  • Forecasting tools for bid adjustments

How Do I Protect My Margins on Fixed-Price Contracts?

  1. Audit every open job with WIP reports
  2. Renegotiate what you can with data
  3. Rebid your pipeline with current costs
  4. Tighten procurement processes

What Financial Metrics to Watch Weekly

  • Gross profit margin by individual job
  • Cost per unit/square foot/hour
  • Work-in-progress
  • Days in receivables
  • Cash runway

Building a Financial System

  1. Integrate PM with QuickBooks
  2. Implement true job costing
  3. Build a custom dashboard
  4. Establish weekly financial rhythm
  5. Get a construction-savvy financial partner
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