Prices up, confidence down after 100 days of Trump 2.0

“Lumber and metals costs shot up in March, whereas contractors’ inboxes are bulging with ‘Pricey Valued Buyer’ letters asserting additional will increase for a lot of merchandise,” stated Ken Simonson, chief economist at Related Basic Contractors (AGC), in an 11 April be aware.

“Speedy-fire modifications in tariffs threaten to drive costs larger for a lot of important development items,” he added.

The worth of supplies and companies utilized in nonresidential development rose 0.4% in March, the third month-to-month enhance in a row, AGC stated.

It was the primary time since September 2023 that enter costs had risen for 3 consecutive months, and comes after greater than a 12 months of steady or falling costs, Simonson stated.

Inside the 0.4% hike, the costs of metal mill merchandise soared 7.1% in March, whereas aluminum jumped 5.1%, and lumber and plywood rose 2.7%.

AGC issued a caveat, nonetheless.

The costs used to calculate the indexes had been collected round 11 March.

“Since then,” AGC stated, “the administration has imposed new tariffs of 25% on metal and aluminum imports, 25% on many items from Mexico and Canada, 145% on imports from China, and 10% on most different international locations. Further tariffs on copper and lumber are below evaluate and far larger tariffs on many international locations had been imposed on April 9 however then suspended for 90 days.”

AGC stated new and deliberate tariffs would enhance prices for a lot of development supplies and are more likely to result in larger prices for a lot of non-public and public sector development tasks.

“Our members are attempting to ship one of the best worth for the private and non-private sector shoppers they serve, however it’s arduous to ship that finest worth when you don’t have any concept how a lot you will should pay for most of the supplies required to construct tasks,” AGC chief govt Jeffrey Shoaf.

‘Materially diminished outlook’

One other employers’ physique, Related Builders and Contractors (ABC), stated a survey for its Development Confidence Index confirmed members reporting some development in backlog throughout March, however that issues modified after Trump’s “Liberation Day” world tariff bonanza on 2 April.

ABC carried out its survey between 20 March and 6 April.

ABC Chief Economist Anirban Basu stated: “Backlog elevated in March and contractors remained optimistic relating to the long run, however this largely displays contractor exercise and sentiment previous to April 2, when essentially the most consequential financial coverage in a number of many years was introduced.”

However even earlier than 2 April, round 80% of ABC contractors stated suppliers had notified them of tariff-related worth hikes, and practically 20% of contractors stated tasks had been paused or interrupted due to tariffs throughout March.

“These tariffs have already materially diminished the outlook for development exercise in 2025,” Basu stated.

“Many companies are poised to delay and even cancel deliberate capital investments given the present enterprise atmosphere and each day market convulsions. Situations will probably deteriorate additional if elevated tariff charges stay in place for any significant size of time.”

Sharp rise in abandonments

Cincinnati-based information and software program firm ConstructConnect’s Challenge Stress Index for March rose barely – 1.1% – on February.

The index tracks bid date delays, on-hold exercise ranges, and mission abandonments.

Behind the modest rise of 1.1% was a 9.5% enhance in abandonment exercise, which greater than offset declines in bid date delays (down 0.7%) and on-hold exercise (down 8.0%).

The 9.5% rise in March was a pointy reversal from a downward development within the earlier two months. Abandonments fell 14.7% in February and 16.1% in January, in CostructConnect’s evaluation.