Builders Embracing New Tricks To Manage Impacts Of Tariffs, Labor Shortages

South Florida contractors are among the busiest in the country, with more concerns in the market about too much construction than not enough. That means they've had to find ways to finish jobs in a perpetually volatile economic climate.

Construction firms are increasing their use of artificial intelligence, modular and off-site construction, and bulk materials purchases to offset price swings and shorten project times, panelists said at Bisnow’s South Florida Construction and Development Summit last week. 

“It seems like every few years there's something that hits the industry,” Rinaldi Group President and CEO Anthony Rinaldi said onstage at the Coral Gables Country Club. “Now, we constantly are dealing with tariffs.”

With more than $4B in construction financing handed out to South Florida luxury residential developments since April, builders need to find ways around the escalating costs to stay in lenders' good graces.

Rinaldi Group, like many others in the industry, began ordering supplies in bulk in anticipation of fluctuations in tariff policies, Rinaldi said.

“Our experience … with the administration [has been] volatile, and you don't know what the target is going to be from one minute to the next, which is really what creates more uncertainty, and it puts a lot of developers on the sidelines,” he said.

Even some of South Florida’s most prolific developers have struggled to start projects amid the uncertainty.

Construction costs have increased 3.4%, and building costs have climbed nearly 4% over the past year, a higher rate than the prior three years, according to a November report by Skanska.

But tariffs aren’t the only culprit. The industry already faces a shortage of about 450,000 workers, according to Skanska. 

Job openings in construction have been increasing since the Great Recession, but they were exacerbated during the pandemic, doubling numbers from the early 2000s, according to a 2024 analysis of Bureau of Labor Statistics data by Freedonia Group.

Immigration enforcement actions may have a harsher effect on the labor shortage, according to a February Skanska report, which found that immigrants lacking permanent legal status make up around 15% to 23% of the sector.

Resia Chief Operating Officer Ricardo Blas said his company has invested in modular and prefabricated construction, which reduces the need for on-site labor and shaves down the cost and timeline for a building project. 

“When we saw all the labor and material breakdown [in the] supply chain, we decided to put this factory together,” Blas said. “We're going to lower the cost, we're going to bring those [units] to other projects, and that's very cool.”

The 420-unit Resia Golden Glades took 18 months to build, and the bathrooms and kitchens were built in a manufacturing facility in Fairburn, Georgia, that Resia bought in 2023. 

“You see our factories, their automated robotics — you can do one bathroom in two hours,” Blas said. “It’s nice.”

Artificial intelligence is increasingly making its way into the construction process, although adoption is spotty. Roughly 65% of construction and real estate companies surveyed by Slate Technologies this year aren't using AI, and 40% of commercial real estate leaders in a Deloitte study had positive results implementing AI, but 39% experienced challenges.

Panelists at the event highlighted the use of AI-integrated cameras on jobsites to identify safety hazards, unsafe conditions or workers not wearing hard hats as a way the technology is already being used.

Beyond safety precautions, AI can be used to ride-share loads going to a jobsite, maximizing deliveries and limiting trucks and trips, Nucor Vulcraft Verco Design Supervisor Brigitte Jenkins said.

Plans are rarely printed anymore, and AI has not only decreased the manual labor of going through plans but has also helped with accuracy, Suffolk Vice President Guillermo Navarro said.

“What's the most valuable asset in construction, in product life? It's time,” he said. “Time has no dollar value. What makes or breaks a project is time. AI is here to actually help manage all of that.”