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COMPOSITE OVERVIEW: The PSI retreated for a second consecutive week since posting a surprise multiyear high reading last month. For the week ending February 10th, 2024, the composite reading fell 8.4% to close at 130.6. While all three components of the Index moved lower in the latest week, the largest activity declines occurred in the seasonally adjusted level of abandoned and bid date delayed activity which fell 11.3% and 9.2% respectively. Trailing behind was on hold activity which fell a very modest 1.6% week-on-week. Since late-October 2023 the composite has made a series of saw-tooth movements, each of which has been of greater amplitude than the previous. Much of this behavior has been the result of significant swings in the level of projects being abandoned. Given this, it is important to recall that while the composite is an equal weight measure of all three stress measures, the absolute number of abandoned projects constitutes slightly less than 5% of all projects that experience any form of stress.
COMPONENTS MONITOR:
| Delay Bid Date | On Hold | Abandoned |
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Sector Status Update: Public and private sector project stress results can and do at times trend independently of one another in part due to their different funding mechanisms. This year both sectors have reported quickly rising activity in the early weeks of the year, made worse by the fact that that year-end 2023 readings experienced far less seasonal decline than is typical. For the first time this calendar year the absolute level of weekly abandoned public projects fell below the level recorded in any prior year going back to at least 2020. While this is an encouragement, the latest weeks result was barely below that recorded in the same week during 2022. In the private sector both the weekly absolute level of abandoned and on hold projects remains well above historic same week levels. In the sixth week of the new year the level of abandoned and on hold projects was 18% and 47% above last year’s level.
About the Project Stress Index
The Project Stress Index (PSI) monitors the level of U.S. construction projects, excluding single family residential, that have experienced a bid date delay, have been placed on hold, or have been abandoned over the last 30 days. Each component has been indexed against the average of their weekly values recorded during 2021. 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.
