Heading into 2025, commercial construction was hitting new highs. Development was accelerating, driven largely by a surge in manufacturing starts — up a staggering 135% from 2019 to 2024. According to the U.S. Census Bureau, commercial construction spending reached $740 billion in early 2025, marking the sector’s highest level in over two decades.
But then came April 2.
That’s when President Donald Trump announced sweeping new tariffs, a move that has sent shockwaves through the commercial construction industry. Within weeks, developers began backing away from projects. SuretyNow, a national provider of construction bonding, reviewed 2,200 bonding applications and found a 56% drop in construction activity in April 2025 compared to the previous year.
The numbers tell a clear story:
- 77% of general contractors say their project costs have increased since the tariff announcement.
- 53% report delays directly tied to the new economic measures.
Typically, spring is when groundbreakings ramp up — not this year. The uncertainty and cost spikes are reversing that seasonal trend, and many developers are pausing rather than pushing forward.
What This Means for Landlords, Developers, and Investors
This sharp downturn in commercial development activity could mean tighter construction timelines, rising material costs, and more risk in the bidding and bonding process. Landlords and developers should reassess their project pipelines and consider lengthy potential renegotiations with contractors and suppliers.
We’re advising clients to review their contracts, lock in pricing where possible, and seek legal guidance before moving forward with new construction commitments. If you’re unsure how these changes impact your plans, now is the time to reevaluate.
The Wright Law Firm is closely monitoring how these policies are affecting commercial development across New York and beyond. There is a new playing field, one where uncertainty rules. Contact us for strategic counsel tailored to your project’s needs. We can be reached at (212) 619-1500.