Tariffs Hit 70% of Contractors But Only 40% Have Raised Bid Prices

Tariffs are already showing up on job costs in 2026, and the numbers are striking. According to IMA Financial Group 2026, 70% of contractors report being directly impacted by tariff-related cost increases, yet only 40% have responded by raising their bid prices. The remaining 60% are, by definition, eating the difference.

• What do the tariff numbers actually show for contractors in 2026?
• Why are most contractors not raising their prices?
• How are schedule delays making the cost problem worse?
• Why This Matters for General Contractors

What do the tariff numbers actually show for contractors in 2026?

According to IMA Financial Group 2026, approximately 45% of firms report no pricing response whatsoever to tariff-driven cost increases. That is not a rounding error. That is nearly half the industry absorbing higher input costs on steel, lumber, aluminum, and electrical components without adjusting what they charge the client.

The downstream effect is straightforward: if your material costs climb 8 to 12 percent and your bid price stays flat, your margin shrinks by the same amount. On a $400,000 project, that math gets uncomfortable fast. Contractors who locked in bids months ago before tariff inventories depleted are especially exposed. According to Nationwide Insurance 2025, construction material prices remained mostly stable through 2025 as pre-tariff inventory buffered costs, but those buffers are expected to deplete, with price increases following. That delayed hit is already arriving for active projects.

For the 40% of firms who have raised prices, the competitive question becomes whether clients walk, negotiate harder, or accept the adjustment. The market answer so far appears to be mixed, with some project categories showing resilience and others stalling.

Why are most contractors not raising their prices?

There are a few honest reasons. First, many GCs are locked into signed contracts with fixed price structures, which means the tariff costs hit margin with no ability to pass them through mid-project. Second, competitive pressure in bidding environments makes unilateral price increases risky when the next bidder may not have adjusted yet. Third, some operators are simply hoping the tariff situation resolves before the full cost lands.

According to the Las Vegas Sun 2026, a related study found that 72% of contractors expect negative impacts from policy and cost pressures in 2026, which suggests the concern is industry-wide, not isolated to a few firms. That broad recognition of the problem has not translated into uniform pricing action, and the gap between awareness and response is where the financial damage accumulates.

There is also a client communication issue. Raising prices without explanation is a faster way to lose a bid than raising prices with a clear, documented rationale. Contractors who have built reputations for transparency with clients are in a better position to have that conversation than those who have operated on handshakes and tight margins. Clients who trust you will hear your reasoning. Clients who only know you from a number on a page will just call the next number down the list. That is not a small distinction when you need to reprice work mid-cycle.

How are schedule delays making the cost problem worse?

Material cost increases are one side of the problem. According to the Las Vegas Sun 2026, 65% of contractors are experiencing schedule delays, and delayed schedules carry their own cost exposure. Labor held on-site longer, equipment rental extensions, subcontractor rebooking fees, and escalating carry costs on financing all compound when a project runs weeks or months past the original timeline.

When delays stem from supply chain disruptions tied to tariff-affected materials, the exposure multiplies: you face both higher material costs and the extended timeline costs that follow. A contractor who bid tight margins on a commercial project in late 2025 assuming normal lead times is now potentially managing a scenario where materials cost more AND arrive later than planned.

According to construction.com 2026, tariffs, inflation, and policy shifts are among the business challenges contractors fear most this year, alongside managing project volume uncertainty. The combination of cost pressure and scheduling pressure leaves less room to absorb surprises anywhere else in the project lifecycle. That is a different operating environment than even two years ago.

For GCs who want to understand how operational and field efficiency gaps compound cost pressure across trades, the broader picture on outdated business models in contracting for 2026 is worth a look alongside these numbers.

Why This Matters for General Contractors

The bid pricing gap is the most actionable story in this data. If 60% of the market is not adjusting prices in response to known, documented cost increases, the contractors who do reprice correctly and explain why will face short-term friction but long-term margin preservation. The ones who absorb costs silently will stay busy and get thinner.

This is also a client relationship story. Owners and developers who understand the tariff environment are not surprised when a GC brings updated numbers to the table. Owners who are insulated from market conditions may need the conversation started for them. That is part of the job now. The contractors who are having those conversations proactively are in a better position than those who wait for the client to notice a change order request with no context.

The firms that will hold margin through the rest of 2026 are the ones updating their estimating assumptions now, building tariff contingencies into new bids, communicating clearly with clients about why costs look different than they did 18 months ago, and not counting on pre-tariff inventory prices to hold through project completion. That is not pessimism. That is reading the numbers that 70% of your competitors are also seeing and deciding to act on them before the squeeze does it for you.