Construction project stress eased in December, reflecting the industry’s resilience despite significant economic headwinds in 2025, according to Cincinnati-based ConstructConnect’s Project Stress Index (PSI).

ConstructConnect’s composite represents an equal-weight measure of the seasonally adjusted level of preconstruction projects that have experienced a delayed bid date, have been placed on hold or have been abandoned in the last 30 days.

The PSI on Dec. 31 closed at 102.1, down 18.7% from a month earlier, as all three stress indicators moved lower. Abandonments led the decrease, falling 27.2% from November levels, while bid date delays and on-hold activity declined by 12% and 10% respectively.

Compared to December 2024, the PSI has fallen 4.3%, driven by a 23.2% decrease in on-hold activity and a 9.8% fall in bid date delays. Abandonments remain 21.1% above their year-ago levels, partially offsetting the improvement in the other indicators. 

Last year the construction industry faced material price increases from tariffs, labor market pressures and the longest government shutdown in history, yet the index only sits 2.1% above the PSI’s 2021 baseline, according to Devin Bell,  ConstructConnect’s associate economist. Additionally, both bid date delays and on-hold activity currently track below their 2021 baseline levels. 

“The project pipeline largely withstood 2025’s volatility without sustained increases in the PSI, signaling that owners and developers will continue construction activity despite ongoing economic uncertainty,” Bell said. “Improving financial conditions could also support confidence, as recent interest rate cuts and recovering bank appetite for commercial real estate loans have expanded traditional lending availability.”

Private project abandonments increased 15.1% year-over-year, though the noticeable rise reflects last year’s exceptionally low reading, he wrote. For reference, December 2025’s private abandonment level sits 8.5% below 2023 and 5% above 2022, positioning current private abandonment activity well within normal historical ranges.

On-again, off-again tariffs exacerbated construction project stress.

“Tariffs imposed on key U.S. trading partners throughout 2025 created material cost pressures across the construction sector,” Bell said. “This included significant upticks in key construction inputs like steel, copper and aluminum. As firms began exhausting their pre-tariff stockpiles, owners and developers began facing rising input costs.”

The impact for the PSI peaked in June 2025, when abandonments jumped 46.6% and on-hold activity rose 11.5%, he said. These increases pushed the PSI up over 20% month-over-month to its highest level of 2025.

“Trade deals and tariff exemptions soon after allowed construction material prices largely to decrease,” Bell said. “Following the peak in June, PSI retreated consistently for several months.”

The PSI monitors nonresidential and multifamily projects in their preconstruction phases only, 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 the timing, direction and amplitude of market changes.