Quick answer: Construction costs for schools have risen roughly 6.8 percent over the past year. The two main drivers are metals, where tariff rates as high as 50 percent on some imported products have pushed aluminum prices up around 40 percent, and HVAC and electrical equipment, where nationwide data center construction is soaking up manufacturing capacity and stretching lead times to a year or more. Schools should plan major equipment purchases 18 to 36 months out, pull roof and envelope work forward, push out cosmetic projects, and budget 15 to 20 percent contingency on both cost and schedule.
The market has shifted meaningfully in the last year or two. Here’s what’s changed and what it means for a school planning a construction or capital project.
What’s gotten more expensive, and what hasn’t?
Escalation is back. Non-residential construction costs rose about 6.8 percent over the twelve months through the first quarter of 2026, with materials up around 7 percent.
Metals are the biggest driver, and it’s tariff driven. Section 232 tariff rates went as high as 50 percent on some imported steel and aluminum products, which pushed aluminum prices up roughly 40 percent. Other metals moved less but still meaningfully: steel pipe and tube is up about 12.5 percent year over year, and cement has climbed around 7.7 percent. Any project leaning on structural steel or metal components feels this.
The other major driver has been building since the pandemic: HVAC and electrical equipment. Data centers are going up across the country in enormous numbers, and they’re pulling so much mechanical and electrical equipment out of the supply chain that it’s harder for any project, school or otherwise, to get what it needs on a normal schedule.
What hasn’t moved much is worth knowing too. Finishes, flooring, paint, casework, and most site work have stayed relatively flat, and commodity electrical items like standard circuit breakers are still readily available. The pressure is concentrated in structure and in mechanical, electrical, and plumbing (MEP) work. That means what you build matters more right now than when you build it.
What should schools pull forward, and what should they push out?
For anything requiring significant HVAC or electrical equipment, plan 18 to 36 months out depending on size and complexity. The equipment itself can take a year or more to arrive even if the rest of the project could be delivered in eighteen months. Starting on a traditional timeline without accounting for equipment lead times is one of the most common ways a school project gets derailed.
Pull forward any roof or building envelope work. Water intrusion compounds quickly into mold and structural damage, so this is worth being proactive about. As a general rule, if you’re planning to do something in the next two years, start planning it now and build in 5 to 7 percent escalation per year from today’s costs.
Push out anything cosmetic or non-essential to the building’s function. It’s also worth pushing out speculative capacity increases, meaning new wings or added classrooms, if you’re not fully confident enrollment will support them.
Where are the lead time traps that catch schools off guard?
Electrical and HVAC equipment are the main culprits.
On the electrical side, a school-scale project is generally looking at one to two years on the long-lead items. Panelboards that used to arrive in 8 to 12 weeks are now quoting 28 to 48 weeks. Standard switchboards are running around 52 weeks, pad-mount transformers 40 to 65 weeks, and medium voltage switchgear 52 to 80 weeks against a pre-pandemic norm closer to 24. If your project involves a utility service upgrade, add to that, since substation-class transformers can push past two years.
On the HVAC side, off-the-shelf units move faster, but anything larger or custom-configured runs 16 to 28 weeks to fabricate, and longer on fully custom units. Rooftop work that needs crane access frequently lands in the three to six month range once you account for scheduling.
Make sure your general contractor is working from current lead times rather than an assumption. A lot of contractors are still scheduling as if this equipment takes 8 to 12 weeks. Ask for the quoted lead time in writing, with the equipment release date shown on the schedule, before you sign anything.
How much contingency is realistic today compared to a couple of years ago?
Plan on 15 to 20 percent contingency on top of your projected project cost at the start, especially for anything new or not yet fully scoped. As the project becomes more defined, that can come down to 5 to 10 percent once you’ve resolved most of the unknowns.
Schedule needs the same treatment. A project you expect to take two years often ends up taking two and a half to three once you factor in delays and the unexpected. Two years ago a schedule slip was usually a labor or permitting problem. Now a single piece of equipment can do it.
If a school only has budget for one project this year, where should it go?
For maintenance-driven spending, the order is roof, then envelope, then HVAC. Roof issues come first because leaks cause mold and structural damage if left unaddressed. HVAC follows, particularly for schools in hot climates. Cosmetic work can wait, and the main cost of delaying it is material escalation, generally in that same 5 to 7 percent range.
Planning consistently beats emergency repairs. An emergency HVAC replacement can carry a 20 to 35 percent premium over a planned, proactive replacement, simply for the speed required.
What do schools commonly underfund or overlook?
Capital replacement reserves are a common gap. Without them, a major equipment failure can put a school in a difficult financial position, so it’s worth assessing building systems now and budgeting for their expected replacement timeline.
Soft costs are another blind spot on larger projects. Design, permits, commissioning, and owner’s representative fees don’t show up in a contractor’s per-square-foot construction estimate, but they typically add another 15 to 20 percent on top of the construction cost itself. Furniture, fixtures, and low-voltage technology such as cameras and internet infrastructure are also easy to leave out of a budget, since architects and contractors generally won’t include them unless a school asks explicitly.
FAQ
Why have school construction costs gone up so much recently?
Mainly two things. Tariff rates as high as 50 percent on some imported metal products pushed aluminum prices up around 40 percent, and nationwide data center construction has pulled HVAC and electrical equipment out of the supply chain, driving both costs and lead times higher.
How far in advance should a school plan for HVAC or electrical equipment?
Eighteen to 36 months, depending on size and complexity. Long-lead electrical items like switchgear and transformers run one to two years, and custom HVAC equipment takes 16 to 28 weeks or longer to fabricate.
How much contingency should a school budget for a construction project?
Fifteen to 20 percent at the start of a project, when scope is still uncertain, decreasing to 5 to 10 percent as the project becomes fully defined. Schedule contingency matters just as much as budget contingency.
What do schools most often forget to budget for?
Soft costs, meaning design, permits, commissioning, and owner’s rep fees, which typically add 15 to 20 percent on top of construction. Also capital replacement reserves, and furniture, fixtures, and low-voltage technology like cameras and internet infrastructure.
Watch the full conversation with Michael Soh on this week’s episode of Tuesday Tips, live every Tuesday at 10 a.m. Pacific and 1 p.m. Eastern. Find more resources at growschools.com.
Want to share?
