Cumming Group’s quarterly Economic Insights reports have covered challenging U.S. economic conditions, particularly shifting trade and immigration policies that contribute to rising costs for key construction materials while also tightening an already difficult labor market. Uncertainty is the key theme, as it has been difficult to anticipate how the current administration’s trade and labor policies will play out, and precisely how those impacts will ripple throughout our industry and the broader economy.

Yet, school districts across the country have needs that cannot be put on hold until federal policies and economic conditions stabilize. With this in mind, we wanted to take a closer look at how districts are managing their construction and renovation projects amidst a uniquely challenging economic climate.

Since the specific facility needs and funding mechanisms for educational projects vary regionally, I’ve asked our top K12 construction experts from each region to share what they are seeing locally — and offer some thoughts on how districts in their part of the U.S. can meet the needs of students while avoiding budget overruns and disruptive timeline delays.

Eastern U.S.

The cost of construction in the Eastern region has continued to rise over the past 10-15 years and has only worsened recently as a result of broader labor shortages and materials cost volatility. To meet these challenges, we advise careful consideration of the delivery method – including the possibility of moving away from CM-at-risk and looking at something like a pre-qualified hard bid. The pre-qualification step is essential, otherwise a district could be backed into accepting a lowest bid from a contractor not truly able to meet a project’s needs.

Stakeholder engagement is also essential and can be a lot for districts to handle in-house, especially when many are grappling with their own internal staffing challenges like high turnover. Working with a truly independent project management consultancy can help ensure confidence of architects and contractors that might otherwise be tempted to shy away from public projects in favor of private projects with fewer stakeholders.

-Chris Whitley (Vice President, Project Management)

Northwest

In contrast to many regions facing an influx of students, districts in the Northwest are seeing the opposite: declining enrollment. In the 2024–2025 school year, 57% of districts reported fewer students. Urban districts in particular have experienced sustained declines over the past two decades, while some rural and less densely populated areas have remained relatively stable or seen slight increases. Fewer students means less operating revenue, tightening budgets just as costs rise, which impacts districts’ ability to deliver on the schools they promise to their constituents.

In addition to declining enrollment, California districts face facilities-specific mandates that expand capital scope and raise construction costs:

• TK for All, which mandates more TK rooms, age-appropriate restrooms, and dedicated play areas
• Growth in students with severe disabilities, who require specialized classrooms, therapy/sensory spaces, accessible restrooms, and lifts/elevators
• Expanded special education and accessibility requirements for path-of-travel corrections, ramps, and signage
• Enhanced safety and security considerations like controlled entries, fencing, cameras, door-locking hardware, and emergency communications
• Indoor air-quality and energy-code updates such as HVAC modernization, filtration, and lighting/controls

To address these financial pressures, we collaborate with school districts to plan and manage bond programs that maximize the effectiveness of every dollar spent. Given the persistent skilled labor shortage in Northern California, contractors can afford to be selective. Therefore, we must make our projects as attractive as possible by establishing realistic timelines, utilizing collaborative delivery models, and providing clear, well-coordinated project scopes.

-Jorge Rojas (Vice President, Project Management)

Texas/Central U.S.

Texas school districts, like many across the country, are straining to accommodate a continued influx of students from other states, especially in booming urban centers like the Dallas-Fort Worth and Houston areas. Steady cost escalation remains a concern in Texas and surrounding states, although the cost increases in this region have been a bit less extreme compared to other parts of the U.S.

One of the most notable issues facing K12 districts and community colleges in Texas is potential legislation that would change how frequently bond elections are held. This potential change could impact cost, labor availability, and start dates, thereby threatening to delay openings. This would necessitate thoughtful solutions, such as looking more at re-purposing existing facilities and additions rather than large stand-alone projects.

Strategic bidding procedures, contractor procurement, and creative phasing of construction starts based on funding are vital practices to ensure schools can accommodate growth and avoid opening delays. Design considerations, such as incorporating more multi-function, multi-purpose educational spaces, are being used to meet the volatile growth, funding, and legislative environment.

It is crucial to have a fully integrated team – including a financial advisor, project management, design and construction team – established in the early stages of planning to meet the challenges of growth, funding limitations, and market conditions.

-Steve Risser (Vice President, Business Development)

South/Florida

Like many other regions, Florida and the Southeast U.S. is being impacted by uncertainty around tariffs, particularly with regard to how those tariffs will affect materials prices. At the same time, schools are bursting at the seams as districts face a huge influx of students moving in from other parts of the country.

Value engineering is one important way K12 districts in Florida can address the demand for more student capacity in a state with specific building regulations that add cost and complexity to construction efforts. Along similar lines, we’re recommending a heavy emphasis on sourcing local materials that are less likely to be impacted by tariffs, such as coral stone, to keep budgets and timelines on track.

Florida is a state with particularly strict land-use entitlements, which can lead to complications that must be taken into consideration when planning and scheduling private-school projects. That’s why it is important to work with both a land-use attorney and a qualified owners representative familiar with the intricacies of education projects in Florida.

-Mena Morgan (Vice President, Project Management)

Southwest

Like most regions, the Southwest is seeing rising costs due to labor shortages and the impact of tariffs on materials prices. In Southern California specifically, preparations for the upcoming Olympic Games are compounding many of these pressures: massive transportation and infrastructure upgrades contribute to material and labor scarcity, which in turn drive up costs and stretch timelines. In a region where we typically would expect cost escalation of around 3-4%, we’re now seeing closer to 6%.

Careful planning and creative problem-solving are essential to get ahead of these challenges. For example, it’s important to book contractor work well in advance, especially during peak times like summer when construction is less disruptive to school operations.

One creative solution we’re finding helpful is to bundle projects where appropriate to attract larger contractors, who in some cases can have better resources. If a district needs three separate athletic fields, for example, those could be bundled as a single, streamlined project.

-Kunal Shah (Senior Vice President, PM Public)

Final Thoughts

School districts are under intense pressure to meet their community’s educational needs while being good stewards of taxpayer dollars and making the most of the funding they do receive. Considering the broader economic climate, it’s important now to get creative and plan effectively – something that our local teams are uniquely qualified to help with.