U.S. Construction Slows Sharply Following Tariff Announcements

Key Takeaways

• Construction activity dropped 56% year-over-year in April 2025, based on over 2,200 bonding applications applications
• 76% of general contractors reported rising costs due to new tariffs.
• 53% of general contractors reported project delays due to new tariffs
• Data suggests a bad start to the 2025 building season, with project volumes trending downwards, when they usually trend up 

Introduction

With President Trump in office, the construction industry is facing its most turbulent period in over a decade.With the tariff announcements, builders all across the country are expressing concerns over how “Liberation day” tariffs are impacting their businesses. 

Out of curiosity and concern, we at SuretyNow decided to dig into our bonding data to measure the magnitude of impact. As a surety bond provider, we have front-row insight into early construction activity. When a contractor wants to break ground on a project, they typically need to get a performance bond. So when bond requests slow down, that’s often the canary in the coal mine for the entire construction ecosystem.

To get the full picture, we didn’t stop there. We also surveyed 1,000 general contractors and asked them how the tariffs are impacting their costs and timelines.

What we found is sobering.

Bonding Activity Signals a Steep Decline

Our bonding data, which reflects real-time applications for performance bonds, paints a clear picture: construction is sharply down since the announcement of various tariff policies.

In August 2024, bond requests represented $203M worth of construction projects. That figure climbed to $228M by October. A seasonal dip followed in November and December—common in the U.S. construction cycle—as project activity typically slows heading into winter. 

But what came next broke the pattern. While January saw a short-lived rebound, February and March reversed those gains. And by April 2025—the first full month after the tariff announcements —bonded project value crashed to just $92M, the lowest in nearly a year. This isn’t just winter malaise. Construction usually accelerates heading into spring. Instead, 2025 is on a downward spiral.

The first four months of 2025 provide a stark contrast to the same period in 2024. Under Biden, bonded construction projects steadily ramped up from January through April, following the typical spring build-up. But in 2025, under Trump and post-tariff uncertainty, the trend has reversed. January started strong, but by April, bonded project value had plunged to less than half of what it was a year earlier. A sharp contraction has replaced the usual seasonal upswing.

Tariffs Are Driving Costs Up Significantly

We asked 1,000 general contractors a simple question: Have the new tariffs increased your building costs?

Their answer was nearly unanimous. A staggering 76% said yes, with 172 saying costs rose “significantly” and another 587 reporting “somewhat.”

Only 225 respondents reported no change, while a negligible 16 said they weren’t sure.

This is a critical finding. Construction relies on a global supply chain—from steel rebar in Mexico to plumbing fixtures in China. Tariffs act as a tax on that chain, and those costs ripple straight down to contractors, developers, and ultimately, the housing market.

And They’re Slowing Projects Down, Too

Costs aren’t the only casualty. When we asked contractors whether the tariffs had caused delays, nearly 53% said yes.

While 462 respondents reported no change to project timelines, 406 said they experienced occasional delays, and another 125 said delays were frequent. Only 7 respondents were unsure.

Tariffs aren’t just an economic lever—they’re a friction layer. When key materials are delayed at ports or priced out of budget, entire job sites can grind to a halt.

Final Thought: A Fragile Recovery at Risk

The construction sector is foundational to the American economy, supporting 7.6 million jobs and driving growth across housing, infrastructure, and local communities. But it’s also one of the first industries to react when input costs rise and policy shifts create uncertainty.

Our data shows a clear slowdown in bonded construction activity to start 2025, with project values falling well below typical seasonal trends. Combined with rising material costs and reported delays from contractors on the ground, the outlook suggests mounting pressure across the ecosystem.

As the building season gets underway, the industry finds itself at a crossroads. The next few months will determine whether this is a temporary disruption or the early signs of a more prolonged cooling across America’s construction landscape.

Methodology & Data Sources

All bonding data in this article comes directly from SuretyNow’s internal database, covering over 2,200 performance bond requests submitted between January 2024 and April 2025. These requests span a wide range of project sizes and locations, providing a real-time lens into early-stage construction activity across the U.S. The data is fully anonymized and aggregated to highlight broader industry trends.

We also conducted a nationwide survey of 1,000 verified general contractors between March 25 and April 3, 2025. To ensure data quality, we filtered for licensed general contractors (not subcontractors) actively engaged in public works projects, where bonding is a standard requirement and contractors tend to operate at higher levels of scale and compliance.

About SuretyNow

SuretyNow is a licensed surety bond provider serving contractors across the US. With thousands of bond applications processed through our platform, we offer real-time visibility into early-stage construction trends.