The National Association of Home Builders in the United States is warning about rising costs that it says are squeezing the construction industry after a recent spike in U.S. import taxes on Canadian softwood lumber. Higher U.S. duties and new tariffs are having serious repercussions as American builders contend with escalating material and labour expenses, NAHB chairman Buddy Hughes cautioned on Monday. Builders have also been struggling during a period of sluggish sales. “Market conditions remain challenging with two-thirds of builders reporting they are offering incentives to move buyers off the fence,” Mr. Hughes said. The index’s latest survey also showed that 40 per cent of builders reported reducing prices in December, with an average price drop of 5 per cent. Warnings from the NAHB about inflationary pressures places it at odds with the powerful U.S. Lumber Coalition, whose members include Seattle-based Weyerhaeuser. [to access the full story a Globe and Mail subscription is required]