Even if the tariffs aren’t hitting your exact product, chances are they’re shifting the global supply chain just enough to nudge up your landed cost or delay your next order.
Australia’s construction supply and service sector is built on a web of local subcontractors, small manufacturers, equipment hire firms and importers. It’s one of the most fragmented sectors in the economy: around 98% of businesses employ fewer than 20 people. Market share is spread thin. Aside from a few big names in steel, concrete and prefab, most businesses run lean and local.
That gives SMEs agility but not much buffer. Most lack the financial depth to absorb big cost swings. So when tariffs or supply chain shocks hit, they either raise prices on the next job or eat the difference. And if they’ve already signed a fixed-price contract, there may be no room to move at all. That’s when margins get wiped.
Job costing is critical in this environment. But many small firms still rely on outdated quoting systems, rule-of-thumb labour rates, or spreadsheets that don’t reflect today’s costs. Underestimating hire duration or rates is common. Freight costs and delivery logistics are often undercooked. Scope creep—doing more than was quoted for—eats into profit without anyone noticing until it’s too late.
The quote-killing chaos of tariffs.
Tariffs raise prices and create volatility. You quote a job today, but by the time materials arrive or you go to lock in your supplier, the price has shifted. Steel, HVAC units, and prefab components, all common items in Aussie construction, are exposed to ripple effects from global tariffs, especially anything linked to the US or China.
Some SMEs try to include contingencies in their quotes. Others cross their fingers and hope for the best. The risk? You’re locked into a fixed-price contract while your costs quietly blow out in the background. That 10% profit you planned can vanish real quick.
The 5% swing that can make or break you.
Let’s break this down. Say you’re running a $500,000 job. You expect a 10% margin—that’s $50,000 in profit. If you go 5% over on costs, your profit is gone. You’re now working for nothing. In fact, once you factor in fixed overheads, you might be in the red.
We’ve learnt from successful stories how tightening up quoting and tracking can make a real difference:
- Double-check labour rates, including on-costs
- Refresh material pricing with your suppliers close to when you quote
- Factor in hire buffers and delivery costs accurately
- Capture scope clearly and make sure variations are charged for
If you go 5% over on costs, your profit is gone. You’re now working for nothing.
Another example: you quote $20,000 for a small install job, expecting a $4,000 profit. You forget to allow for rising scaffold hire costs and forget to invoice for extra clean-up work. Result? You pocket maybe $1,000 instead. Do that a few times a year, and your whole annual margin is gone.
Does a demo on how to track labour, materials and scope changes in NetSuite interest you?
We can show you how to stay on top of costs, avoid losing that 5%, and keep margin surprises to a minimum.
The patterns we keep seeing in misquoted jobs.
Job cost inaccuracies usually come from the same set of culprits:
- Outdated quotes from suppliers, a 30-day-old steel quote might be $10k off today
- Underestimated labour, forgetting to factor in super, leave, insurance
- Missed items, consumables, tools, fuel, tip fees—they add up
- Scope creep, doing extra without charging for it
- Expired supplier pricing, especially on imports
- Underestimated hire durations or equipment needs, extra days on machinery can double the cost
- Logistics and freight cost blowouts, especially for regional jobs or tight delivery schedules
If you’re still quoting from memory, using the last job as a benchmark, or ignoring freight swings, you’re rolling the dice. And dice don’t pay wages.
Tools that help—and where they fall short
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- Estimating software with live, regularly updated cost libraries
- Digital takeoff tools that speed up quantity calculations and reduce manual error
- Mobile timesheet apps that allocate labour hours to specific jobs or cost centres
- Accounting systems that support job-level tracking and cost code allocation
- Field tools that help identify and document scope creep, material shrinkage and unapproved variations
- On-site billing systems that capture inventory usage in real-time and feed directly into your financials
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- Running multiple disconnected systems that require double-handling or manual data transfers
- Outdated cost libraries or rate sheets that don’t reflect current market conditions
- Accounting platforms that lack the flexibility to track hire durations or allocate plant and equipment usage accurately
- Quoting tools that miss freight, logistics or handling charges—or fail to prompt for them at all
- Quoting tools that don’t flag scope creep or lack variation tracking
There’s no silver bullet, but if your tech makes it faster to quote accurately, easier to track spending, and smoother to invoice, you’re on the right path.
Practical wins you can act on now.
- Track labour properly: That $40/hr worker is really costing you closer to $50 with overhead. Quote accordingly.
- Don’t quote from memory: Get current pricing. Check every time.
- Bundle the little stuff: Fuel, fixings, permits—if you’re not charging for them, you’re paying for them.
- Quote faster: Every delay gives someone else a chance to win the job.
- Use costing to negotiate: Know your numbers, and you can lock in better deals with suppliers.
Bottom line
Construction is unforgiving of bad cost planning. Every nail, every hour, has a price, and if you don’t account for it, it comes out of your pocket. Tariffs just raise the stakes.
So, if 2025 is throwing you curveballs, don’t wait for the market to settle. Tighten your quoting. Track your costs. Bill quicker. Know where your margin is, and protect it like your business depends on it.
Because it does.
