Construction Economic News

Project Stress Index registered 120.2, indicating that last week’s project stress conditions were 20.2% above their 2021 average level.

Project Stress Index registered 120.2, indicating that last week’s project stress conditions were 20.2% above their 2021 average level.

The latest Employment Situation Report from the Bureau of Labor Statistics speaks of a +150,000 gain in the total number of U.S. jobs in October. That figure on its own is ho-hum. It is the second lowest monthly increase since pandemic days. (June of this year was weaker at +105,000).

Project Stress Index registered 120.2, indicating that last week’s project stress conditions were 20.2% above their 2021 average level.

Project Stress Index Moves Higher On Rising Abandoned Project Readings: 122.7, +3.4%

COMPOSITE OVERVIEW: The project stress index 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. For the week ending October 15th, 2023, the Index registered 118.3, signaling a stress level approximately 18% above the average 2021 weekly reading. The Index decreased by 0.5% week over week resulting primarily from a decline in the level of bid date delayed projects. This movement overshadowed minor changes in the level of on hold and abandoned project levels. The latest result ends a two-month long trend of sequentially higher stress readings in which abandoned and on hold projects grew rapidly. Additional weeks of measurements will determine if this week’s pause in rising stress readings represents a temporary pause in a broader run-up, a plateau, or the beginning of a decline in construction stress.

COMPOSITE OVERVIEW: The project stress index 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. Compared to the average level of project stress in 2021, today’s stress level is almost 19% higher. The week’s composite result increased by 0.5% from a week ago due to a 5% increase in projects placed on hold. This increase overshadowed small declines in delayed and abandoned project levels. The composite’s current reading is its highest since late April 2023. The latest absolute count of abandoned projects marked the series’ third highest reading since 2020. After seasonal adjustment though the figure was less concerning as it is customary for abandoned counts to temporarily surge during the second half of the calendar year.

Can public spending continue to play the role of industry backstop while public finances steadily become untenable?

According to the Federal Reserve Bank of Atlanta’s wage tracking data through August 2023, job switching no longer pays the considerable premium that it did as recently as the first half of this year. Measured as the three-month moving average of median wage growth in hourly pay, August’s results indicated 5.2% and 5.6% wage growth for job stayers and switchers respectively across all industries. At the peak of the wage growth disparity in mid-2022 job switchers experienced nearly 3% greater wage growth relative to job stayers. The collapse of this premium has come about entirely from the decline in the wage premium being offered to switchers in 2023.

COMPOSITE OVERVIEW: The project stress index 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. Compared to the average level of project stress in 2021, today’s stress level is 18.5% higher. The week’s composite result increased by 3.3% from a week ago as rising abandoned project activity more than offset small declines in delayed and on hold activity. The composite’s current 5-month high reading is the result of elevated delayed and abandoned activity in contrast to the previous high which stemmed from higher on hold activity.