Labor shortages, material volatility, tariffs, and supply chain disruption are making construction projects harder to price, staff, schedule, and deliver. For owners, contractors, subcontractors, and counsel, these pressures are no longer isolated project problems. Instead, they are becoming recurring sources of claims and disputes.
At the 2026 American Arbitration Association® (AAA®) Construction Conference, “Building Resilience: The Future of Construction Disputes and Alternative Dispute Resolution (ADR) in an Ever-Changing World,” panelists examined how labor and supply chain pressures are affecting project delivery, contract expectations, and dispute resolution strategy.
The message for construction teams: disruption should be addressed while work is still underway. Clearer contract language, timely notice, better documentation, and early dispute resolution tools can help parties manage pressure before it threatens the project.
Labor Shortages Are Changing Project Assumptions
Labor shortages are affecting project budgets and schedules, especially on complex projects that require large numbers of skilled workers. When the labor market changes after a contract is signed, the assumptions that shaped pricing, staffing, and performance may no longer reflect a project’s reality.
For construction teams, that means labor availability should be discussed early and documented carefully. Owners and contractors may need to revisit budget, schedule, staffing, and procurement expectations before the issue becomes a formal claim.
Force Majeure and Delay Clauses Need More Precision
Disruptions involving labor shortages, material delays, abnormal weather, tariffs, pandemics, or other events can raise difficult questions under force majeure and delay provisions. Parties may dispute whether an event qualifies for relief, whether notice was timely, and whether the disruption caused the claimed delay or cost increase.
Clear contract language and timely notice can help reduce those disputes. Notice should not only preserve rights; it should also start the conversation about how the issue will be managed while the project continues.
Material Volatility Is Raising the Stakes for Contract Drafting
Material price escalation now extends beyond tariffs and can involve steel, lumber, batteries, semiconductors, and other critical project components. These issues can lead to disputes over escalation clauses, relief thresholds, substitutions, procurement timing, and risk sharing.
For owners, contractors, and subcontractors, the contracting stage is critical. Parties should understand how much pricing risk they are assuming, whether relief is available, and how escalation will be measured if market conditions change.
Early ADR Can Help Keep Projects Moving
One of the session’s key points was that parties do not need to wait until the end of a project to address disputes. Early mediation, early neutral evaluation, Dispute Avoidance and Resolution Boards, and targeted arbitration can help resolve change orders, delay issues, pricing disputes, and technical disagreements as they arise while work continues.
Active construction projects often cannot afford prolonged uncertainty. Fast, focused dispute resolution can help preserve relationships, protect project momentum, and avoid turning every disruption into a full-scale arbitration or litigation.
Read the Full Report
The full AAA report, “Building Resilience: The Future of Construction Disputes and ADR in an Ever-Changing World,” explores how construction disputes are evolving amid labor and supply chain disruptions, climate risk, financial pressures, insurance challenges, AI, BIM, global mega projects, and mediation strategy.
Download the full report to learn how construction leaders, counsel, contractors, insurers, and dispute resolution professionals can identify risk earlier, manage claims more effectively, and use ADR tools to keep complex projects moving.