Recent U.S. trade policies are shaking up the economy, impacting GDP, imports, and the construction sector.
The impact of recent trade policy is becoming more apparent in the broader economy, with the most pronounced effect showing up in first quarter GDP figures. Although the data doesn’t yet reflect the full extent of price and supply chain impacts tied to tariffs, a significant rise in imports — subtracted in GDP calculations — pulled the number down to -0.3%, the first negative reading in three years.
Construction pricing has remained relatively steady, with most markets seeing quarter-over-quarter increases between 0.8% and 1.5%. Elevated inventory levels and the exemption of in-transit goods from new tariffs have helped buffer input cost increases to date. However, many suppliers and vendors are warning of near-term price escalations.
Looking ahead, a broad softening in demand is expected across most construction sectors, alongside persistent labor market pressures. Economic indicators point to a meaningful slowdown over at least the next two quarters.
Industry sentiment reflects growing caution. The ABC Construction Confidence Index dipped modestly in March, with contractors reporting concerns around project financing, material costs, and labor availability — though backlogs remain generally stable, suggesting activity will hold in the near term even as broader economic headwinds intensify.1
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While pricing has remained steady, slight escalation, growing backlogs, and ongoing labor shortages point to mounting challenges as tariffs begin to drive expected cost increases.
Tariffs can support specific U.S. producers, especially those competing directly with low-cost imports. But for sectors like construction — where imported components are essential — the broader impact is inflationary. In some cases, U.S. manufacturers also face higher input costs, reducing their global competitiveness.
This spotlight provides an in-depth breakdown of recent tariffs and their potential impacts on the construction industry. JE Dunn economist Will Roberson explains the history and timeline of proposed tariffs, reciprocal tariffs, and the potential recession risk based on these economic policies.
Explore how evolving U.S. trade policies are reshaping the supply chain and why the U.S. is likely to import less from China in the coming decade.
Discover why the popular rule for defining a recession might be misleading and what the latest economic data reveals about the U.S. economy.
Learn about the White House’s plan to impose reciprocal tariffs on countries with trade barriers against U.S. goods and its potential impact on the economy.
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