Construction Costs and Labor Shortages Reshape South Carolina Home Building
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South Carolina builders entered 2026 facing a construction environment fundamentally different from just five years ago. A combination of persistent labor shortages, rising material costs, and tariff pressures has created new challenges for residential construction across the Palmetto State.
The numbers tell a stark story. The construction industry nationwide needs to attract 439,000 new workers in 2025 and an additional 499,000 in 2026 to meet demand, according to projections from Associated Builders and Contractors. South Carolina faces particular pressure as one of several southern states experiencing severe skilled labor shortages. The organization’s model shows average hourly construction earnings already up 4.4 percent over the past year, outpacing wage growth in other industries.
These workforce pressures directly affect housing availability across the state. As explored in At A Crossroads: SC’s Housing Market Faces Mounting Affordability Pressures, population growth continues to strain existing inventory while builders struggle to ramp up production. Project timelines stretch longer. Costs rise accordingly.
The labor challenge runs deeper than simple hiring difficulties. Skilled tradespeople remain in short supply across electricians, plumbers, and specialized construction roles. In the Upstate alone, approximately 35,000 people work in construction, with the average annual wage reaching roughly $85,000. Those competitive wages reflect intense competition for available talent.
Material costs compound the workforce challenges. Tariffs on steel, aluminum, and lumber have pushed construction input prices higher throughout 2025. Builders report price hike notices arriving regularly, making project budgeting increasingly difficult. Some estimates suggest current tariff policies could add nearly $11,000 to the cost of building a typical home.
These combined pressures have real implications for South Carolina families seeking homeownership. As detailed in What South Carolina Real Estate Attorneys Need to Know About 2026 Market Trends, the legal and financial complexity of real estate transactions continues to increase alongside construction challenges.
The state has begun responding to the housing supply crunch. SC Housing launched its Made It Home! Program in late 2025, recruiting residential builders committed to delivering affordable workforce housing. Five builders agreed to construct 130 new homes in the program’s first phase, targeting teachers, healthcare workers, and first responders priced out of conventional markets.
Industry observers suggest the labor shortage may take a generation to fully resolve. A recent workforce survey from the Associated General Contractors of America paints a concerning picture. Ninety-two percent of construction firms report difficulty finding workers to hire. More troubling, 45 percent of respondents say labor shortages are directly causing project delays. South Carolina contractors face additional pressures, with 36 percent of firms in the state reporting impacts from immigration enforcement activities.
For now, South Carolina home building remains constrained by factors largely outside local control. National trade policy, immigration enforcement, and systemic workforce development gaps all contribute to conditions that make housing construction more expensive and time-consuming than buyers and builders would prefer.
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About the Author
Jim Toppe is the founder of Toppe Consulting, a digital marketing agency specializing in law firms. He holds a Master of Science in Management from Clemson University and teaches Business Law and Marketing at Greenville Technical College. Jim also serves as publisher and editor for South Carolina Manufacturing, a digital magazine. His unique background combines legal knowledge with digital marketing expertise to help attorneys grow their practices through compliant, results-driven strategies.
Disclaimer
Toppe Consulting is a digital marketing agency. We do not provide legal advice. Consult a licensed attorney for legal matters.
Works Cited
Associated Builders and Contractors. “ABC: Construction Industry Must Attract 439,000 Workers in 2025.” ABC, 24 Jan. 2025, https://www.abc.org/News-Media/News-Releases/abc-construction-industry-must-attract-439000-workers-in-2025.
Associated General Contractors of America. “Construction Workforce Shortages Are Leading Cause Of Project Delays As Immigration Enforcement Affects Nearly 1/3 Of Firms.” AGC, 28 Aug. 2025, https://www.agc.org/news/2025/08/28/construction-workforce-shortages-are-leading-cause-project-delays-immigration-enforcement-affects.
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