News Summary
The Cleveland construction industry is confronting serious challenges due to labor shortages and new tariffs, according to the latest 2025 Construction Industry Survey by CBIZ. The survey highlights a cautious sentiment among industry leaders, with 31% citing skilled labor shortages as their biggest concern. Additionally, tariffs on materials like steel and aluminum are driving up costs, prompting contractors to adjust strategies. Despite these hurdles, nearly half of the respondents remain optimistic about future opportunities, although the overall outlook remains cautious.
Cleveland, OH – The local construction sector is facing significant challenges, primarily due to the impact of new tariffs and labor shortages, according to a recent survey conducted by CBIZ. The 2025 Construction Industry Survey reveals a prevailing sense of caution among industry leaders, transitioning from earlier optimism in early 2023, when easing inflation, expectations for decreasing interest rates, and a backlog of projects were viewed as positive indicators.
The survey, which garnered responses from 400 participants—25% of whom were from Northeast Ohio—highlights that 31% of respondents consider the lack of skilled labor as their greatest challenge. This concern has been exacerbated by ongoing political changes, including immigration policies that have restricted labor availability within the industry.
Alongside labor shortages, tariffs have emerged as a significant threat. Although only 9% of those surveyed indicated that tariffs were their primary concern, experts suggest this figure could have risen if the survey had remained open longer, especially following the announcement of “reciprocal” tariffs in April by former President Trump. Another 13% cited the current political climate as their top perceived threat. The response to these challenges has seen 60% of contractors report an increase in wages intended to attract skilled workers. Furthermore, 28% of respondents have experienced project delays this year directly related to the labor shortage.
To manage escalating costs driven by tariffs, CBIZ advises construction clients to lock in material costs early and include escalation clauses in their contracts. The company also emphasizes the importance of maintaining flexible project plans and building financial buffers to navigate ongoing political and economic uncertainties.
Despite facing these hurdles, a notable 49% of respondents maintain optimism regarding construction opportunities over the next three years, although this represents a decline from 59% in 2022. While home-building figures showed a positive increase of over 5% in July, residential permits saw a nearly 3% drop, suggesting potential slowdowns may lie ahead. This dual trend highlights the growing complexity within the construction landscape.
The impact of tariffs, particularly on steel and aluminum, continues to drive up the prices of construction materials. Home Depot has acknowledged that tariffs will lead to modest price increases, causing many contractors to rush to procure materials before these tariffs take effect. Consequently, this urgency is further inflating prices, fueled by rising energy costs and heightened demand for materials as contractors brace for the potential ramifications of these tariffs.
Some mixed signals also emerged regarding the forward outlook of the construction market. A strong majority of contractors expect their sales to increase over the next six months due to ongoing demand for construction inputs, despite the ongoing supply chain disruptions. Additionally, favorable conditions for developers are expected due to the recently passed federal tax legislation, known as the Big Beautiful Bill, which includes provisions such as accelerated depreciation for new construction.
Overall, while the construction sector in Northeast Ohio grapples with immediate challenges posed by labor shortages and tariffs, opportunities still exist within the market. Nevertheless, a combination of federal policies and market dynamics generates a cautious outlook for the continuation of growth in the sector.
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Additional Resources
- Crain’s Cleveland: CBIZ Survey Shows Tariffs Put Brakes on Construction
- News 5 Cleveland: How Tariffs Are Clouding the Costs of Home Construction
- Cleveland.com: Northeast Ohio Companies Brace for Ride on the Tariffs Rollercoaster
- Construction Dive: Construction Materials Costs Rise for Third Month Amid Tariff Pressures
- Wikipedia: Tariffs and the Construction Industry
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CLEVELAND STAFF WRITER The CLEVELAND STAFF WRITER represents the seasoned team at HERECleveland.com, your premier source for actionable local news and information in Cleveland, Cuyahoga County, and beyond, delivering "news you can use" with in-depth coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news impacting the region—backed by years of expert reporting and robust community input, including local press releases and business updates, while providing top reporting on high-profile events like the Rock and Roll Hall of Fame inductions, Cleveland International Film Festival, and holiday parades, alongside key organizations such as the Cleveland Clinic, Cleveland Orchestra, and Great Lakes Science Center, plus leading businesses in manufacturing and healthcare like Sherwin-Williams and University Hospitals, and as part of the broader HERE network including HEREDayton.com, offering comprehensive, credible insights into Ohio's vibrant landscape. HERE Cleveland HERE Dayton
