Daly’s advice for those on the front lines of estimating and procurement: “If you don’t have escalation language in your contracts or quotes, you have to put a very short duration on the shelf life of that quote. People are going to get burned. The best advice is: know you’ve got redundancy on components and that there are interchangeable options — which is difficult, but critical. And if price volatility hits, you have to protect yourself.”

A recent PlantTours survey found that 55% of manufacturers have seen tariffs cut profit margins by as much as 10–15%. For many, this is a “slow bleed,” with steel prices blowing up original estimates and construction leaders forced to renegotiate contracts mid-project. In Crumpton’s world, that means shops are still burning through backlog, but the storm clouds are clearly on the horizon.

“We’re kind of in that buffer zone between what was already built, what was in reserve,” Crumpton says. “We haven’t seen anything tariff-related yet, except on refrigerants.” He points to a $50 surcharge on R454B refrigerant from Trane as the canary in the coal mine.

ABC’s analysis of Bureau of Labor Statistics data echoes this volatility: steel mill product prices jumped 5.9% in April, and copper wire and cable rose 5%. Contractors are busy, and the construction backlog is at a 20-month high, but nearly 1 in 4 anticipate shrinking profit margins in the next six months.

“Materials directly affected by tariffs saw sharp price increases for the month,” said ABC Chief Economist Anirban Basu. This kind of volatility forces contractors and fabricators to rethink every estimate, proposal, and timeline.

“When you buy a tractor trailer load of these big steel rolls that goes on your duct cutting machine, that’s a lot of money. And if you miss that by 15%, your shop is going broke,” Crumpton warned. The reality is that steel price swings don’t just hit the bottom line — they threaten the viability of ongoing projects.

For many, the only solution is to pass these costs along to customers or risk taking a loss on the project — a dynamic that’s reshaping relationships across the supply chain.

“It’s not just numbers on a spreadsheet,” Crumpton says. “It’s whether you make payroll, whether you can keep your shop open.”

SPIRAL: A silver lining is appearing in the trade war, as domestic manufacturing is reshoring and bringing new business to sheet metal shops. However, labor is a persistent issue. (Staff photo)

Project Delays and Pass-Throughs Hitting Customers

The secondary effects are mounting. According to PlantTours, 59% of construction professionals have seen product cost increases as a top unexpected impact, and a full 75% of businesses have passed those costs on to customers. That’s leading to customer loss — 16% of construction and transportation firms say buyers are walking away from deals.

Crumpton is watching closely: “If it’s not resolved rather quickly, we are going to start experiencing longer delays, mainly because of the electronic components … especially in the data center mission critical market, because that market is on fire. You can’t build buildings quick enough before they’re pre-leased.”

PlantTours reports that more than half of construction firms have delayed or canceled projects due to tariff-related concerns, and 12% of all sectors cite outright supply chain disruptions.

While tariffs were intended to bring more manufacturing back to the U.S., the numbers tell a different story. Only 9.8% of companies in the PlantTours survey have actually reshored production, and 64% haven’t made any major supply chain changes. But with HVAC manufacturing in particular, Crumpton does see glimmers of hope: “We are seeing more domestically built products … Motivair is building chillers in New York, Dunham-Bush in Florida, Vertiv in South Carolina. It’s still the Wild West, but we’re getting there.”

Crumpton’s advice is blunt.

“You have to be really diligent to ensure your proposal says that this price is current today. If there is an increased tariff on this product, there will be a price adjustment accordingly,” he advised. That’s become gospel in an environment where steel prices can spike overnight and manufacturers face quality issues (14% in PlantTours’ survey) when sourcing new suppliers.

ABC’s numbers back this up: 87% of contractors reported being notified of tariff-driven material price hikes, and 22% had projects delayed or canceled in April due to tariffs — up from 18% in March.

Labor Shortage and the Silver Lining

For Crumpton, the labor shortage is the elephant in the room.

“How much can we bring back before we inundate ourselves with work we can’t perform because we don’t have the skilled labor?” he asked. The PlantTours survey shows labor shortages account for 16.4% of business challenges — almost equal to tariffs.

Yet, nearly 30% of businesses reported some upside: winning customers who want domestic goods, higher profits from less import competition, and improved supply chain resilience. Still, as Crumpton noted, “There’s silver lining, but that silver lining comes with a little bit of an incline until we get this labor shortage figured out.”

With margins squeezed and labor scarce, many companies are doubling down on automation and tech. PlantTours data shows 40% have increased investment in automation or innovation. Crumpton is right there with them.

“I think that we’ve done a poor job as an industry in keeping up with what’s available out in the world. But we’re beginning to see the benefits,” Crumpton said, speaking to the service side of the HVAC business.

He points to sensor-driven maintenance as a game changer. Companies like nClarity are putting sensor boxes on equipment — “about the size of this phone, and it’s got a modem in it” that can stream real-time data back to the office.

“So you’re not going out there every 90 days and throwing away clean air filters. Let’s change the air filters when they need to be changed. Let’s check the operating pressures on the compressor when the system says check the compressor, not just putting gauges on it and taking charge out of the unit,” Crumpton said.

Noting the labor-saving importance of sensor-driven maintenance, Crumpton’s final assessment is clear-eyed and pragmatic.

“Volatility is the new norm. Surviving — and thriving — means updating contracts, investing in smart technology, and making talent development as much a priority as production,” he concluded. “It’s smart, and it helps our lack of manpower—at least temporarily.”