This is an as-told-to essay based on a conversation with general contractor Eduardo Barboza, 41, who lives in Phoenix, Arizona. Barboza has been in the construction industry for 22 years and has owned a business for 10 years. He’s seen a significant disruption to his business since the Trump administration announced plans for new tariffs in January. The conversation has been edited for length and clarity.
The full impacts of the tariffs haven’t developed yet, but we’re already dealing with pricing uncertainty. It’s created a lot of unknowns, which is making it very hard to do business.
We had a pretty good system for estimates. Everything was based on our records.
Someone would come to us with a bathroom project, and we knew it’d be around $5,000. Now, we can’t say for sure. The flooring, the tile, it could all go up overnight.
Now, every piece of the project has to be dissected. Turnaround for estimates is up from 24 hours to 72 hours. I’ve even had to assign an extra person just for pricing. That’s money and time we lose as a business.
Some owners are mad at me right now. We were contracted in November to do the the main electrical service on an 84-unit building in Glendale. There were 15 banks of electric meters we had to replace and each one went up in price. It was very hard to go to the client and said, “Hey, by the way, that $225,000 project is now going to cost you $278,000.”
The owner didn’t cancel that project, mostly because it was required maintenance. Any other kind of project is in serious jeopardy.
Investors are walking away from renovations
Instead of renovating homes to flip, investors are just selling homes as is, which hurts our business. Just in the past week, we lost two major projects.
One was a $1.3 million house in Scottsdale. As we were doing the pricing, flooring went up $1 per square foot, tile went up 36 cents per square foot, cabinets went up 10% and then an extra 10% like a week later. So we had to bump up the price to $143,000. The investor decided to keep the home as is.
We had the same scenario with a $1.5 million house in Scottsdale that needed a little over $326,000 worth of renovations. With the current market, renovation at that scale didn’t make sense for the investor.
Those were jobs we had in the bag, we were just waiting to start. That’s almost $470,000 and just came off of our books in seven days.
I’m paying my team to work on my home to weather the slowdown
It costs a lot of money to build a good team, and I’ll do anything I can to keep them.
Finding new business is my job. So if I don’t have jobs lined up for the week, my employees still all get paid for that week. It’s not their fault. It’s mine.
This week I told them come to my house. I’m going to pay them anyways, so I said let’s finish up the projects I’ve been pushing off. I have a crew laying down concrete pavers around my pool. It’s costing me around $3,800 for the week.
We’ve been through moments like this before. It’s a return to the mindset we had during the 2008 recession or the early days of the pandemic.
When times get tough like this it’s a mentality of “screw the profits,” every decision is just survival to stay afloat. Can we just make enough to keep the guys paid? We can worry about profits at another time.
As the leader of my business, I can’t bring fear to my team.
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