Construction sector faces tariff uncertainty and worker health crisis

Construction Sector Today: Tariff uncertainty, worker health crisis, regional consolidation and slow city recovery

Overview: The U.S. construction industry is facing several simultaneous pressures that are shaping project decisions and company strategies. Uncertainty about tariffs and supply chains is forcing owners and developers to rethink procurement. A growing mental-health and overdose crisis among workers is prompting new training, funding and policy responses. Large builders are reorganizing regionally to better serve local markets. In one major city, construction employment and nonresidential work remain below pre‑pandemic levels, even as some high-profile projects reach completion.

Top issues at a glance

– Tariff and supply-chain uncertainty is influencing project costs and contract language.
– Worker mental health, suicide and overdose rates in construction are at crisis levels.
– Firms are consolidating regional operations to focus on local civil and infrastructure work.
– Urban construction recovery is lagging, especially for nonresidential projects, affecting jobs and wages.
– New projects and cultural-focused developments continue to move forward despite headwinds.

Tariff and contract uncertainty

Owners and developers face unclear answers about whether tariffs will be applied, how large they might be, and how those costs will affect project margins. Because the construction supply chain is global, tariffs applied abroad can raise costs for U.S. projects and even dictate whether a project moves forward. Contractors increasingly seek contract language that would guarantee reimbursement for future tariff costs, and owners see those requests as understandable. In response, clients are trying earlier procurement and shifting sourcing to local suppliers where possible. Local sourcing is difficult, however, because many buyers try the same strategy at once and because many essential materials are produced globally. Early legal work on contracts is being emphasized to set expectations, protect levers for owners, and manage cost and schedule risks throughout a project.

Technology and AI

Technology already plays a large role in managing projects, handling documents and modeling builds. Artificial intelligence may speed up processes and could begin to influence project decisions, but human labor and supervision will remain essential even as robotics and AI take on more tasks.

Mental health and overdose crisis among workers

The human cost in construction is stark. More than 5,000 construction workers died by suicide in 2023, and overdose deaths reached nearly 15,900 that year, with synthetic opioids involved in about three out of four overdose deaths. The suicide rate among male construction workers is about 75% higher than among men in the general population. Construction workers are six times more likely to die from suicide than from job-site injuries.

These problems are linked to chronic pain, long hours, sleep loss, project uncertainty and time away from family—factors common in large, demanding projects such as data centers. In response, some firms have launched opioid task forces, trained thousands on Narcan use, and pushed mental-health awareness programs. Local government budgets have added funding for construction safety training, day laborer centers and programs serving low-wage immigrant workers. Trade groups and unions are scheduling in-person site safety and Narcan training and stepping up outreach during National Suicide Prevention Month.

Regional consolidation and company reorganizations

Some major builders are reorganizing to focus on regional civil work. One new regional firm, formed by combining local subsidiaries and specialty teams, will concentrate on transportation and water projects in a large metro area. The reorganization brings together several firms with tunneling, hydraulic, deep foundations and resiliency skills under a single regional business to seek scale, simplify operations and align risk management. Leadership and finance teams have been named and the deal targets completion in a specified quarter. Financial terms were not disclosed.

City-level recovery and project news

In one large city, construction employment averaged about 143,100 jobs in 2024, down 11% from 2019 levels. Nonresidential spending also lagged, with last reported figures showing a slight decline from 2019 and projections indicating further shortfalls. Residential work, helped by remodeling and tax incentives for multifamily projects and office conversions, has shown stronger recovery. The slow rebound in nonresidential hiring has hit immigrant workers particularly hard; immigrants make up a large majority of the city’s construction workforce.

Meanwhile, several high-profile projects continue to move forward. A newly finished 21-story mixed-income residential building in Harlem now stands complete, offering 222 rental units and 27,000 square feet of cultural space for a nationally recognized theater organization. The project used a local bonus program to support cultural space and mixed-income housing and will begin interior fit‑out of the theater with a planned public opening in future years.

Where this leaves owners, workers and policymakers

Owners and developers are advised to involve legal, procurement and project teams early, plan for cost escalation, and weigh the risks of early purchasing against possible tariff changes. Employers and unions are increasing training and support for mental health and overdose prevention. Policymakers are being urged to restore permitting staff and speed approvals to help the market recover, while budget moves add training and outreach dollars. Regional firm consolidation aims to concentrate expertise and improve delivery of large civil projects.

Key data points

• More than 5,000 construction-worker suicides in 2023; nearly 15,900 overdose deaths the same year.
• Synthetic opioids involved in roughly 75% of construction overdose deaths.
• Construction suicide rate for men about 75% higher than men in the general population.
• City-level construction jobs: 143,100 average in 2024 vs 161,300 in 2019 (11% drop).
• New regional civil firm created from local subsidiaries to target tunnels, bridges, roads and water systems.
• A completed 21-story mixed-income building in Harlem includes 222 apartments and cultural space of 27,000 sq ft.