How Tariffs and Supply Chain Costs Are Driving Up Prices for Skilled Trades—and How Inventory Management Can Help

The skilled trades industry is facing a financial squeeze as tariffs, global logistics challenges, and supply chain costs continue to rise. These pressures have a direct impact on the cost of materials, making it more expensive to purchase the parts and supplies needed for residential service and installations.

For trade businesses operating on tight margins, these increases can be hard to absorb. However, optimizing inventory management can be a way to mitigate the impact. By improving purchasing strategies, reducing waste, and preventing stockouts, businesses can maintain profitability despite rising costs.

The Rising Costs of Materials in 2025 and Beyond

Recent trade policies and ongoing logistics disruptions have caused noticeable price increases in key materials used by skilled trade businesses. Let’s look at some of the main cost drivers:

• Tariffs on Imported Materials: New and continuing tariffs on steel, copper, and aluminum are making essential trade materials more expensive. The U.S. has imposed duties on various metal imports from China, Mexico, and other countries, leading to price increases for pipes, wiring, and HVAC components.
• Supply Chain Disruptions: Ongoing port congestion, shipping delays, and geopolitical instability continue to impact the supply chain. Even domestically sourced materials are experiencing longer lead times and increased freight costs.
• Inflation in Manufacturing Costs: Rising energy prices and labor shortages in manufacturing hubs are adding another layer of cost increases, pushing up prices for everything from circuit breakers to refrigerants.

Price Impact on Skilled Trades Over the Last 5 Years

The impact of these cost increases has been significant, with major material categories experiencing price hikes:

Copper Wire (2019-2024):

• 2019: $2.80 per lb
• 2021: $4.20 per lb
• 2024: $5.20 per lb (+85% over 5 years)
• Forecast (2029): Expected to reach $6.70 per lb, driven by demand from the renewable energy and electric vehicle sectors.

HVAC Refrigerants (R-410A, 2019-2024):

• 2019: $100 per unit
• 2021: $130 per unit
• 2024: $220 per unit (+120% over 5 years)
• Forecast (2029): Prices could exceed $370 per unit due to phase-outs and transition to next-generation refrigerants.

PVC Piping (2019-2024):

• 2019: $0.90 per foot
• 2021: $1.50 per foot
• 2024: $2.20 per foot (+144% over 5 years)
• Forecast (2029): Estimated to reach $3.20 per foot depending on raw material costs and potential price-fixing investigations.

How Inventory Management Saves Time and Money

With material prices fluctuating as they are, maintaining a well-managed inventory is more critical than ever. Here’s where an inventory management and purchasing platform comes in. By implementing one, businesses can::

1. Reduce Overbuying and Prevent Stockouts

Many trade businesses order extra materials “just in case,” leading to excess inventory that ties up cash flow. At the same time, running out of essential parts can cause project delays, forcing last-minute, higher-cost purchases. An inventory platform provides real-time tracking to prevent both scenarios.

2. Leverage Bulk Purchasing and Supplier Price Comparisons

With costs rising, purchasing in bulk from the right suppliers can lead to significant savings. Inventory software helps businesses track supplier pricing trends, compare costs, and automate bulk orders when prices are low.

3. Improve Forecasting and Job Costing

By tracking material usage patterns, businesses can better predict their inventory needs, ensuring they order just the right amount. This prevents unnecessary spending while ensuring they have what they need for upcoming jobs.

4. Reduce Shrinkage and Waste

Misplaced tools, lost parts, and wasted materials can eat into profitability. An inventory tracking platform prevents unnecessary losses by keeping a clear record of all stock movement, reducing theft, and ensuring proper usage.

5. Save Time with Automated Reordering

Manual inventory management is time-consuming and error-prone. Automating reordering ensures that businesses always have the right materials on hand, freeing up technicians and managers to focus on service rather than supply chain issues.

Stay Ahead of Rising Costs with Smarter Inventory Management

Material prices are unlikely to stabilize anytime soon, but skilled trade businesses that take control of their inventory will be better positioned to handle the changes. By using an inventory management platform, businesses can mitigate rising costs, reduce waste, and ensure profitability—even in a volatile market.

Want to see how an inventory management system can help your business? Get a demo today!