As material costs for steel and aluminum hit 40-year highs, Nations must look toward resilient procurement strategies to protect their budgets. This report covers essential shifts in stockpiling and contract language that help turn market volatility into a controllable variable. We recommend this read for any Tribal leader planning a major build in the coming year.
Six key takeaways for Tribal Nations
1. Tariffs and material costs are putting Tribal capital projects at greater financial risk.
Deloitte reports that tariffs on steel and aluminum reached as high as 50% in 2025, with effective tariff rates on construction goods reaching 25–30%. These aren’t equivalent to overall construction-cost increases, but they create significant pricing uncertainty.
Tribal implication: Tribal Nations working with fixed construction budgets, grants, or multiyear capital plans may need to reassess project costs, add escalation allowances, and explore alternative materials earlier in design.
2. More projects risk postponement, redesign, or cancellation.
Deloitte cites an 88.2% year-over-year increase in project abandonment activity in August 2025, reflecting growing affordability challenges across the broader construction market.
Tribal implication: Large casino expansions, new government facilities, and community developments may become harder to justify financially. Phased construction, adaptive reuse, and renovations could be more feasible than entirely new facilities.
3. Labor shortages are increasing costs and complicating construction schedules.
499,000 New construction workers projected to be needed in 2026
4.2% Year-over-year construction wage growth as of August 2025
Tribal implication: Projects in rural or geographically isolated communities may be particularly vulnerable to contractor availability, transportation costs, and competition for specialized trades. Early contractor involvement and realistic construction schedules become especially important.
4. Federal funding may not stretch as far as originally anticipated.
Rising costs can create a gap between a project’s approved funding and its eventual construction cost. This is already affecting Tribal infrastructure: in FY2025, the Indian Health Service allocated $11.6 million for potential project shortfalls and related planning and design work, including shortfalls caused by inflation and supply-chain constraints.
Tribal implication: Early cost estimating and alternative funding strategies will be crucial. Some Tribal Nations may need to combine federal grants, Tribal enterprise revenue, and other financing sources to advance projects.
5. Casino profitability pressures could affect funding for community development.
While this finding comes from additional industry research rather than Deloitte, it’s especially relevant to WORTHGROUP’s Tribal clients.
Wipfli’s 2026 Tribal gaming report found that average casino net profit margins declined from 26.12% to 24.50%, despite growing revenue. That means less profit per revenue dollar potentially available for reinvestment and Tribal programs.
Tribal implication: Tribal leaders may face increasingly difficult decisions about allocating capital between gaming improvements, healthcare, housing, infrastructure, and government facilities. Projects demonstrating measurable long-term economic or community value may be easier to prioritize.
6. Strategic design and early planning can help offset rising construction costs.
Deloitte emphasizes material substitution, strategic procurement, modular construction, and digital tools such as Building Information Modeling (BIM) to improve cost and schedule efficiency.
Tribal implication: Tribal Nations could benefit from involving architects, engineers, cost estimators, and construction partners earlier in project development to identify efficiencies while preserving cultural priorities, functionality, and long-term building performance.
Read the Deloitte 2026 Construction Outlook here.