The latest weekly decline resulted primarily from falling Abandonment activity and was further assisted by a smaller decline in Delayed Bid activity. No notable change in weekly On Hold activity was observed.
Over the latest month-long period, Delayed Bid, On Hold, and Abandoned activity have increased by 4%, 7%, and -6%, respectively, sending the Index higher by only 50 basis points (0.5%).
The PSI continues to trend within a narrow range of between 120 and 130, indicating a steady level of industry project stress that is 20% to 30% greater than our 2021 base period.
| Delay Bid Date | On Hold | Abandoned |
|---|---|---|
(Week-on-week changes of less than 0.25% are indicated as unchanged)
Public and private projects often exhibit distinct stress trends due to their varied financing sources.
Six months after the Federal Reserve initiated interest rate hikes in early 2022, conditions for private sector projects deteriorated noticeably, as evidenced by a significant increase in abandonments beginning in mid to late 2022.
Public projects fared far better in 2022 and early 2023, likely as a result of a wave of federal stimulus spending. However, since the fourth quarter of 2023 both sectors are now reporting elevated levels of abandonments compared to historic norms.
Compared to the same week a year ago, public abandonment activity is up 44%, while comparable year-ago private sector abandonments are generally unchanged as they remain at historic highs.
The Project Stress Index (PSI) composite represents an equal-weight measure of the seasonally adjusted level of pre-construction projects that have experienced a delayed bid date, have been placed on hold, or have been abandoned in the last 30 days. The PSI monitors nonresidential and multifamily projects in their preconstruction phases only and thus excludes any single-family home construction. Each component has been seasonally adjusted and then indexed against its 2021 average weekly reading. The independent tracking of each status type gives unique insights into the timing, direction, and amplitude of market changes.
Additional information about the PSI, including detailed data about the individual readings for delayed, on hold, and abandoned projects can be found here.