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Good news held sway for contractors in September, as project stress eased for the third month in a row, according to the latest data from Cincinnati-based ConstructConnect.
The Project stress indexa measure of construction projects that have been delayed or abandoned, fell 0.6% from August to September. The sustained decline follows strong mid-year volatility and puts overall stress just 4% above the 2021 baseline, said Devin Bell, associate economist at ConstructConnect.
“Delays and abandonments of bid dates improved considerably over the course of the month, although they were mostly offset by growth in pending activity,” Bell told Construction Dive. “The downward trend in the index has persisted due to economic and labor uncertainty, although recent activity may benefit from a change in the interest rate outlook.”
The latest report showed an improvement over the summer months, with delays to tender dates falling by 3.8% in September, along with a 9.6% drop in abandonments. However, pending projects rose 19.5% after hitting record lows earlier this year.
But private construction still shows a strong level of resilience. For example, private project abandonments fell 8% year over year and pending activity fell 54.5% compared to the same period in 2024. Bell said global private construction, which surged after President Donald Trump first introduced the tariffs this spring, it has largely stabilized since then.
“Private sector dropout activity increased after the Liberation Day tariffs in April, and then declined over the following months,” Bell said. “As private activity normalized, public sector exits rose rapidly, peaking in August before falling this month.”
Public abandonments rose 16.7% year-on-year in September, along with a 5.8% increase in public projects on hold. Bell attributed these increases to disruptions resulting from federal funding cuts, especially in education and municipal construction.
This weakness in public activity could also intensify. The data in the report runs through the end of September, meaning the effects of the Federal government shutdown on October 1st are not yet reflected.
“Public and private sector abandonments have followed staggered patterns this year, each experiencing spikes followed by partial recoveries,” Bell told Construction Dive. “Private-sector walkouts responded to material cost uncertainty following the Liberation Day tariffs, while public projects have faced disruptions, including the pause in the Jobs and Infrastructure Investments Act.”
These federal funding issues add to the broader challenges facing the construction industry. about one in four contractors report projects delayed or canceled due to fees, according to associated builders and contractors. Meanwhile, almost half cite labor shortages as the main cause of project slowdowns, according to a survey released Aug. 28 by the Associated General Contractors of America and the National Center for Construction Education and Research.
Bell added that these funding issues and high costs will challenge the viability of the project. For this reason, the activity may decrease until aa more favorable perspective arises
