Margins in construction are thinner than ever, and small changes in cost can make or break a project. Mississippi contractors, developers, and business owners now face a perfect storm: tariffs driving up material costs, labor shortages slowing progress, supply chain disruptions complicating schedules, and price escalations threatening project feasibility. These global forces may sound distant, but they are shaping projects right here in Jackson, Ridgeland, and across the state.
Tariffs:The Political Tax
That Hits Home
Tariffs are government-imposed taxes on imported goods. While they can protect local industries, they also increase the cost of raw materials such as steel, aluminum, lumber, and solar panels. Contractors feel the pinch when these costs jump overnight, making it difficult to bid on long-term projects or plan with confidence.
Following the imposition of tariffs on steel and aluminum in 2018, both global and domestic steel prices surged. Today, tariffs are once again a political tool, shifting rapidly in response to Washington’s strategy with countries such as China, Mexico, and Canada. For Mississippi builders, that means uncertainty — and higher bids for clients.
Labor Shortages:
Too Few Hands for Too Much Work
Even without tariff pressure, projects face another significant challenge: a shortage of skilled workers. Mississippi’s construction workforce is aging, with fewer apprentices entering the trades. Contractors compete for a limited pool of electricians, carpenters, and welders, which drives up wages. This shortage leads to project delays, and relying on less experienced crews can pose safety and quality risks.
To combat this, forward-thinking contractors are investing in training, improving retention through better pay and culture, and adopting technologies like prefabrication to reduce their reliance on scarce labor.
Supply Chain Disruptions:
Fragile Links in the Chain
The COVID-19 pandemic, global trade disputes, natural disasters, and shipping bottlenecks have left supply chains shaky. For Mississippi projects, this translates to delayed deliveries, higher transportation costs, and difficulty in forecasting timelines.
Some contractors are adapting by building longer lead times into schedules, securing multiple supplier relationships, communicating risks early with owners, and turning to local sourcing when possible. While these steps can’t eliminate disruptions, they can soften the impact.
Price Escalations: The New Normal
Combine tariffs, labor shortages, and supply chain disruptions, and you get relentless cost escalation. Contractors, developers, and business owners may find that bids go stale within weeks. Projects that were once penciled in may now be shelved. What’s more, those who are locked into fixed-price contracts risk being squeezed.
Legal Tools That Can Help or At Least Ease the Burden
Carefully drafted contracts and sound legal advice can make a difference. Some contractual clauses to be aware of are escalation clauses, change in law provisions, and force majeure clauses.
In general, escalation clauses allow prices to adjust fairly—up or down—based on agreed-upon indexes. When markets fluctuate and costs surge overnight, a carefully drafted escalation clause can safeguard both developers and contractors. On the other hand, if costs decrease significantly, a carefully drafted escalation clause can protect an owner or developer. Think of an escalation clause as both a sword and a shield.
Another clause to be aware of is a change in law provision. A change in law provision is exactly what it sounds like; it can protect against changes in the law after a project has begun construction. A carefully drafted change in law provision may cover new tariffs, but the language matters. The courts have yet to determine whether a tariff constitutes a “tax” under all contracts.
Lastly, force majeure clauses can make a difference. In general, people tend to think of force majeure clauses as covering “unforeseeable circumstances” like major weather events, war, etc. While force majeure clauses can be helpful for addressing delays, they rarely cover cost increases resulting from these delays.
Although the clauses mentioned above can help lessen the costs and unpredictability we see in the market today, the best protection comes from negotiating clear contractual provisions at the outset of a project.
Practical Takeaways
for Mississippi Businesses
When negotiating your next contract or purchase order, some practical takeaways for Mississippi business include: (1) building flexibility into every contract; (2) adding a price escalation clause wherever possible; (3) communicating openly with clients about risks; (4) treating risk management as a core business function; (5) investing in workforce training and new technologies; and (6) continuously monitoring markets and trade policies closely, both domestically and abroad.
Looking Ahead
Tariffs will continue to fluctuate in response to political shifts. Labor shortages are a long-term structural problem. Supply chains are stabilizing but fragile. Prices are likely to remain volatile. For Mississippi contractors, the key is adaptability: use strong contracts, plan for uncertainty, and seek legal guidance to protect your business when costs swing.
About the Author
Dorsey R. Carson Jr. is a construction and civil litigation attorney with Carson Law Group PLLC in Jackson, MS. He advises contractors and business owners on navigating risk in today’s unpredictable market. Contact him at dcarson@thecarsonlawgroup.com.
