Tariff Fallout Erodes Contractor Confidence
Originally Published by: Construction Dive — April 15, 2025
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Part of the Project Kuiper facility under construction at NASA Kennedy Space Center on April 9, 2025, in Cape Canaveral, Fla.
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The increase in March’s backlog offers a snapshot of contractor activity and sentiment before the latest round of tariffs took effect, said Anirban Basu, ABC chief economist.
“Backlog increased in March and contractors remained optimistic regarding the future, but this largely reflects contractor activity and sentiment prior to April 2, when the most consequential economic policy in several decades was announced,” said Basu.
Although hiring expectations improved in the latest survey, concerns about profit margins and sales expectations have intensified. That’s particularly true for respondents who completed the survey after the tariff announcement, according to ABC.
Despite these concerns, builders across all nonresidential subsegments still tacked on projects to backlogs in March. That said, infrastructure remains the only category with significant year-over-year gains, according to ABC.
Basu said ripple effects from tariffs have surfaced in the construction pipeline outlook.
“These tariffs have already materially diminished the outlook for construction activity in 2025,” said Basu. “Many businesses are poised to delay or even cancel planned capital investments given the current business environment and daily market convulsions.”
Although activity has not yet fully slowed, Basu cautioned “conditions will likely deteriorate further if elevated tariff rates remain in place for any meaningful length of time.”