Construction Economic News | ConstructConnect

ConstructConnect's Project Stress Index - March 6

Written by Michael Guckes, Chief Economist | Mar 6, 2024 5:12:52 PM

COMPOSITE OVERVIEW: For the week ending March 2nd, 2024, the Project Stress Index composite rose 1.7% to close at 131.1. Delayed Bid activity fell by 0.2% while On hold and Abandoned activity increased by 3.4% and 1.7% respectively from week-ago levels. The latest weekly reading marks the third consecutive week in which the Index has only moved modestly. Additional modest week-to-week changes would be greatly welcomed after the Index began a
series of rapid and magnifying ascents and descents beginning in the fourth quarter of 2023. The Index’s most recent ascent in late January set a multi-year high, eclipsed only by a small number of weekly readings back in March and April 2020 during the beginning of the COVID pandemic and first shutdown of the modern global economy in history. Unlike in 2020 however, today’s Index readings are being principally driven by extremely high and volatile readings of abandoned projects.

COMPONENTS MONITOR:

Delay Bid Date On Hold Abandoned

(Week-on-week changes of less than 0.25% are indicated as unchanged)

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. The current upward trend in Public, On hold, activity remains consistent with the historical seasonal nature of the series. However, compared to the same week a year-ago, there are 14% more public projects On hold. More concerning is the 70% jump in abandoned public projects in the latest week of 2024 as compared to the same week a year ago. Year-on-year changes in the private sector have been much smaller. In the latest week there were only 9% more abandoned private projects than a year-ago. However, 2023 reported a tremendous surge of first quarter private project abandonments. Comparing the latest week’s abandonments to those from the same week in 2022 shows a 50% gain in abandonment activity.

 

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.