Construction / 1 min read
Construction Industry Resilience Amid Tariff Challenges
Despite mounting concerns over tariffs, the construction industry is showing signs of resilience. Contractor backlogs have reached their highest levels since September 2023. According to a recent survey by Associated Builders and Contractors (ABC), firms with annual revenues exceeding $100 million have seen significant increases in project backlogs while smaller contractors have also experienced modest growth. Mid-sized firms, those earning between $30 million and $100 million, however, have reported a year-over-year decline in backlog, highlighting the disparity in how different segments of the industry are weathering economic pressures.
Tariffs continue to pose a substantial challenge, with 22% of contractors reporting project delays or cancellations in April 2025, due to tariff-related issues—up from 18% in March. A staggering 87% of contractors have been notified of price increases for materials linked to tariffs. A consequence of ongoing trade policies that have introduced significant volatility into the supply chain and increased costs for builders across the board.
Despite these headwinds, contractor sentiment remains relatively optimistic. While the share of contractors expecting a decline in sales over the next six months has risen since the start of the year, many remain confident about profitability. In fact, expectations for profit margins improved in April, even as projections for sales and staffing levels dipped slightly. All three indicators (sales, staffing, and margin) remained above the neutral threshold (50), suggesting continued growth in the near term.
Sector-specific trends, though, reveal a mixed picture. Commercial and institutional construction saw slight gains in backlog, while heavy industrial and infrastructure projects experienced declines. Data centers have emerged as a dominant force in the construction planning market according to the Dodge Momentum Index.
As contractors adapt to shifting market dynamics and tariff-related challenges, their ability to remain agile and forward-looking will be key to sustaining momentum through 2025 and beyond.