Some actionable advice for contractors about reassessing pricing policies
6 BuildersOutlook 2025Issue4
Advice for Builders
Rethinking Pricing as Tariffs Hit
Some actionable advice for contractors about reassessing pricing policies
Trump’ s election will likely improve demand conditions for construction spending but also include risks based on tariffs, project timing, and completion due to labor and supply implications from policies.
Early themes from builders, remodelers, and contractors indicate optimism from the election outcome partly due to clarity and certainty of administration tone for the next four years but also due to the memory of Trump ' s first administration’ s proconstruction industry perspective. For us, the outlook for the industry includes several upside conditions.
The administration is focused on the reduction of waste and inefficiency in favor of growth and expansion of GDP over the next four years. This will likely stimulate long-term residential, nonresidential, and infrastructure construction. A key signal to watch is the impact and affect of reduced regulations and government oversight across the construction services and projects value chain. Builders and developers have been asking for lower permitting costs and timing to help accelerate profitable construction.
A focus on tax cuts and inflation reduction through economic policy can create real dollar expansion for spending on construction and major renovation or expansion projects for the small to medium developer or asset owner looking to improve facilities or expand capabilities.
The America First platform and corresponding tariffs will create an expansion of domestic manufacturing, warehouse, and logistics facilities as well as a repurpose or redesign of existing, low-occupant buildings to support supply chains and inventory. Additionally, we anticipate continued growth in data centers and the AI ecosystem facilities, including both new and repurposed.
The proposed Department of Government Efficiency may have the potential to have a significant impact to the remodeling segment of the nonresidential building industry. Early strategies aimed at reducing working from home and mandating in-office work will create a near-term impact on facility upgrades and optimization; just after Covid-era redesigns for less inoffice work or shared work environments. Today, the Federal government operates over 360,000 nonresidential buildings( of all types) that will need upgrades or enhanced repairs due to a resurgence of use.
There are further benefits beyond improved demand for spending on projects but also help the business operators and owners in the construction industry. Many contractor associations are anticipating benefits due to tax code and structure as well as regulatory process which can create more simplicity and certainty in managing their business.
Tariff & Price Implications
While there are many reasons for optimism and excitement, the new Trump administration also comes with some risks and downside potential, particularly in the areas of tariff and price implications as well as of immigration impact to labor supply and tariff implications to select product prices and availability of critical offshore products or components.
• Tariff and anti-dumping policies can disrupt supply chains and reduce product availability for selecting products, particularly categories which lack domestic production.
• High tariffs also may create shortterm price inflation in building materials due to increases in products and materials from crossborder suppliers but also as domestic producers respond to price opportunities with tariffs in place
• Immigration policy may reduce
Robert Spencer, AVP 915.747.1013 construction workers resulting in slow growth of new projects or extend time to complete projects
Actionable Items The concrete, infrastructure, and tool / equipment rental industry are not immune to these challenges or impact from tariffs, despite much of the industry sourcing and producing within our borders. In order to properly mitigate any risk and or improve your business’ s ability to succeed with tariffs, keep in mind the following:
Stay calm and study the tariff language, timing, and country-targeted response. In order to manage through tariffs, know the details on type, level, class, intent, exclusion, and implication— including the behaviors or triggers which can cancel the tariffs.
Assess the risk level to your business across your network. Determine the origin of your inputs, supply sources, tools, and materials and understand if they are from the tariffed countries impacted. Evaluate your risk exposure of not just price impacts but also limits in supply. Anticipate customer response including General Contractors and Asset Owners to expectations on price pass-throughs, mix, quality, and lead times.
Prepare scenarios and mitigation options. Understand your operating and financial performance in detail to accurately determine where you can withstand supply-based priced increases and absorb in order to win more projects or plan price increases in your bid packages and compete based upon non price factors.
Be agile and focus on adaptability with multiple options as the tariff levels and enforcement will be changing as will competing contractor bid packages as well as GC and asset owner expectations.
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