Home Depot Pros face tighter contractor budgets as construction costs climb

Construction costs were tracking above forecast, with year-over-year gains above 5% and a climb to 8% by late 2026, as tariff pass-through, labor shortages and geopolitical disruptions kept job pricing moving higher. The baseline for final project costs, including contractor margins, was already running around 5% year over year, a squeeze that reaches beyond raw materials and into the timing of the work itself.

That pressure is already visible at the Pro Desk and in special-order conversations. When crews are tight and jobs are booked, contractors become more sensitive to availability, delivery timing and quote accuracy than to shelf price alone. A supply-constrained market makes the comparison shopping more deliberate: the numbers matter, but so does whether a material arrives in time to keep a labor slot from going dark. Data-center-adjacent work is also absorbing contractor capacity, which leaves some parts of construction hot while others slow, and that split shows up in stores as customers either rushing to buy before a project window closes or hesitating because their own trades are booked out.

Home Depot expanded its Pro investments. On May 19, 2026, the company said first-quarter fiscal 2026 sales reached $41.8 billion, up 4.8% from a year earlier, and it reaffirmed its fiscal 2026 guidance. Earlier in the spring, Home Depot expanded its Pro digital experience with project-management and AI tools, then said it would launch an industry-first real-time delivery tracker for big-and-bulky building-material orders. Those tools are aimed at the exact friction points contractors are dealing with now: keeping projects moving, knowing where the load is, and planning around a delivery window instead of guessing at it.

The labor picture behind those tools is still tight. The Home Depot Foundation launched Path to Pro in 2018 with a $50 million commitment to train skilled tradespeople, and Home Depot said its Path to Pro Education Grants program will expand to all 50 states in 2026. The Path to Pro network now has more than 65,000 candidates seeking skilled-trades jobs, while Home Depot cites about 400,000 openings in the skilled construction trades. The U.S. Bureau of Labor Statistics said the Producer Price Index for final demand rose 0.5% in March 2026, and the Federal Reserve Bank of St. Louis tracks U.S. construction payroll employment through June 2026.