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Industry News7 min read

What Does Inflation Mean for Your Construction Bids in 2026?

Inflation in 2026 is not hitting as hard as 2022, but it is still creeping into lumber costs, fuel surcharges, and subcontractor rates. If you are running 4-6 month jobs, you need to price today for costs that will hit next quarter.

Cory Salisbury
Cory Salisbury
Founder & Fractional CFO • Salisbury Bookkeeping

What Does Inflation Mean for Your Construction Bids in 2026?

Material prices up about 2-3% year-over-year. Enough to destroy tight margins on fixed-price contracts.

How to Estimate When Prices Keep Moving

  1. Separate Locked and Exposed Costs
  2. Add a 3-5% Pad to Exposed Costs
  3. Use Escalation Clauses on Large/Long Projects (over $100K or 90 days)
  4. Get Written Quotes with Expiration Dates

What If You Are Locked Into a Fixed-Price Contract?

  • Document everything
  • Identify scope changes for change order opportunities
  • Communicate early rather than at final invoice

Should You Raise Prices Across the Board?

No blanket increases. Analyze your last 5-10 jobs. Test new pricing on three bids. Winning 30-50% of bids indicates proper pricing.

Cash Flow Protection

  • Move to progress billing with more milestones
  • Watch material ordering timing
  • Track cash flow weekly, not monthly
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