The Trump administration’s tariff whiplash appears to be having a negative impact on the U.S. construction industry’s financial outlook, and 1 in 5 builders say the levies are already delaying projects.

Eight in 10 have been notified of materials price increases.

Trade group Associated Builders and Contractors found that tariffs are already biting, with member companies notably less optimistic following one of the president’s major announcements, according to a survey conducted between March 20 and April 6.

Roughly 35% of respondents expected to see their profits margins rise over the next six months. Only about 25% predicted a contraction.

But after the White House announced a minimum 10% tariff on a wide array of international trading partners on April 2, less than 26% of those who responded expected their profit margins to grow, while more than 40% expected them to shrink.

“These tariffs have already materially diminished the outlook for construction activity in 2025,” ABC Chief Economist Anirban Basu said in a statement.

“Approximately 80% of ABC contractors surveyed indicate that suppliers have notified them of tariff-related materials price increases, and nearly 20% of contractors surveyed had projects paused or interrupted because of tariffs during March.”

The April 2 announcement also had an impact on the commercial real estate industry. The Nareit Equity REITs index, which tracks publicly traded real estate owners, fell 2% the following morning. Prologis, the world’s largest industrial REIT, was down nearly 7%, while hotel giants Hyatt Hotels Corp. and Marriott International were down more than 6%.

The stock market has seesawed ever since.

That market instability has contractors bracing for the worst, Basu said.

“Many businesses are poised to delay or even cancel planned capital investments given the current business environment and daily market convulsions,” the economist said. “Conditions will likely deteriorate further if elevated tariff rates remain in place for any meaningful length of time.”

Industry optimism is also down month-over-month. The percentage of respondents who expected to see their profit margins increase fell roughly 4% between February and March.

But the industry was more optimistic last month than a year earlier. That metric was up nearly 2% compared to March 2024.

ABC’s survey also found a modest increase in its construction backlog metric. That number made it to 8.5 in March, up 20 basis points month-over-month and 30 basis points year-over-year.

The shift wasn't felt evenly across the industry. The indicator made it to 9.5 for the infrastructure sector, up from 8 in February 2025 and 6.8 in March 2024.

Meanwhile, the heavy industrial subset rose just 20 basis points month-over-month to 7.4, down from 8.8 in March 2024.

Industrywide, the backlog indicator remains below 2023 levels when it repeatedly crept above 9. The metric peaked at 9.3 that June.