ServiceTitan: 73% of Commercial Contractors Hit by Tariffs
Tariffs, material costs and labor pressures push commercial contractors to protect margins and cash flow

Commercial contractors are putting greater emphasis on profitability and cash flow as tariffs, labor shortages and rising material costs continue to pressure their businesses, according to ServiceTitan's 2026 Commercial Service Market Report.
The report, based on a survey of 1,020 commercial owners, executives and general managers, found that 73% said tariffs materially affected their business during the past year.
Seventy-five percent expect material and equipment prices to rise over the next 12 months, while 70% said they are extremely or very concerned that higher material costs will hurt profitability. Tariff-related cost increases ranked among contractors' top three business risks, cited by 43% of respondents.
- Skilled labor shortages ranked first at 57%, followed by rising labor or overhead costs at 45%. Contractors are also placing more emphasis on cash flow.
- Forty percent ranked improving cash flow among their top three business goals, up from 28% in 2025. Increasing net profit margins ranked first at 42%, while acquiring new customers was cited by 29%.
- Payment delays remain a challenge. Although 82% of contractors said they send invoices within three days of completing work, 96% wait at least 15 days for payment and 30% wait more than 30 days. Recurring revenue also appears to be gaining importance.
- Forty-six percent of respondents said more than half of their commercial customers are on service or maintenance agreements, up from 42% last year.
- Artificial intelligence adoption is also growing. Sixty-two percent of commercial service firms have piloted or deployed AI, while 33% said they are actively using it or have embedded it across their businesses.
- Among firms using AI, 59% reported a positive impact, though only 15% said they have seen a significant positive impact with clear return on investment. ServiceTitan said contractors expect AI to have the greatest near-term impact on scheduling and dispatch, predictive maintenance, estimating and proposals, remote diagnostics, and customer inquiries.
The survey was conducted for ServiceTitan by Thrive Analytics and focused primarily on commercial contractors in mechanical, electrical and plumbing trades. While not roofing-specific, it offers a broader look at business pressures affecting commercial contractors across the construction industry.
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