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Mid-Year 2025 Property Valuation Update

As we move into the second half of 2025, it’s a prudent time to review inflation—particularly cost trends relative to insurable replacement costs for commercial construction and equipment across the US.

09/11/2025

As we progress through the second half of 2025, it’s a prudent time to review inflation — particularly cost trends relative to insurable replacement costs for commercial construction and equipment across the US.

In the first half of 2025, economic discussions centered around global tariffs and their potential to disrupt supply chains, which could lead to higher costs for construction materials and industrial equipment. While overall year-over-year July 2025 cost trends showed an increase compared to January year-over-year, this rise is primarily due to a dip in cost trends observed mid-2024, rather than recent tariff impacts.

It’s important to note that the effects of tariffs on construction and equipment costs typically take six months to be reflected in published data. Therefore, any cost increases related to tariffs may be more likely to become evident from late 2025 to early 2026.

While new tariffs were announced in July, we continue to monitor and report on how such economic developments and other factors appear to be influencing cost trends. Data released in August indicated a 0.9% increase in wholesale prices for July, marking the largest monthly rise since March 2022. This suggests that tariffs and other factors are exerting upward pressure on domestic inflation. Although this update is not reflected in the recap below, if this trend persists, we could see further increases in domestic costs toward the end of the year. We will continue to monitor these developments and provide updates as new information becomes available.

The following is a recap of the mid-year 2025 cost trends for construction and industrial equipment.

If you would like a tailored review of your property valuations or insights into how current trends may impact your portfolio, please don’t hesitate to contact Marsh. We’re here to help you ensure that your valuations remain accurate and actionable.

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