Read this article to understand the level of U.S. nonresidential construction projects that have been delayed, on hold, or abandoned.
COMPOSITE OVERVIEW
The Project Stress Index (PSI) composite closed February 2025 at 112.4, falling 9.7% for the month when compared against January’s reading of 124.5.
The month-on-month (MoM) fall was driven by across-the-board declines among all stress components; however, abandonments experienced the greatest decline, falling by 14.7% MoM.
The decline in projects reporting a delayed bid date or hold was smaller at 6.3% and 5.9%, respectively. Stress conditions in the early weeks of 2025 have been generally better than the results of a year ago.
In 2024, the average composite stress reading was 112.4, and through the first two months of 2024, the composite averaged 130.5. In contrast, the composite in the first two months of 2025 has averaged 117.8. Nearly all of the decline in the year-to-date period has been due to substantial declines in on-hold and abandonment activity.
What is in store for the construction industry in 2025 is difficult to predict. Tariffs and a reduced construction workforce will raise material costs and lengthen construction times. Additionally, the banking sector continues to shun new construction loans, with new loans growing by only 1% in 2024 and even lower in the first month of 2025. The current lending trend is at its slowest pace since March 2013, when financing to the industry was just beginning to recover from the Great Recession.
COMPONENTS MONITOR
| Delay Bid Date | On Hold | Abandoned |
|---|---|---|
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(Month-on-month changes of less than 0.25% are indicated as unchanged)
The Project Stress Index Composite. A seasonally adjusted, equal-weight measure of delayed, on-hold, or abandoned projects. Image: ConstructConnect
SECTOR STATUS UPDATE
Due to the disparate market forces that influence them, public and private projects often exhibit distinct stress trends. The new presidential administration’s decision to curb government spending could result in a significant reduction in the number of forthcoming public projects, leading to a short-lived but severe change in the number of public projects that are delayed, put on hold, or abandoned.
As of late February, the number of public projects experiencing a bid date delay or abandonment was tracking near its historic norms, while the number of on-hold projects is currently at its lowest level since at least 2021. In contrast, private projects put on hold in early 2025 have surged, while the number of delayed bid dates and abandoned projects is tracking at its historic norms.
QUESTIONS ABOUT THE PROJECT STRESS INDEX? READ THE FAQs.
About the Project Stress Index
The Project Stress Index (PSI) composite represents an equal-weight measure of the seasonally adjusted level of preconstruction projects that have experienced a delayed bid date, been placed on hold, or abandoned in the last 30 days. The PSI only monitors nonresidential and multifamily projects in their preconstruction phases, thus excluding 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 market changes’ timing, direction, and amplitude. Additional information about the PSI, including detailed data about the individual readings for delayed, on-hold, and abandoned projects, can be found here.