Construction project stress eased in July after a spike in June, but abandonments were still at historically high levels, 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 July 31 closed at 114.1, down 24.3% from a month earlier when on-hold and abandonment activity surged. In July, projects placed on hold fell 15.4%, while abandoned projects fell 37.1%. Projects whose bid dates were delayed fell by 4%.

Despite the recent volatility, construction project stress has eased modestly over the past three months, with the PSI falling 1.9% during this period.

According to ConstructConnect’s associate economist Devin Bell, project stress levels have remained relatively unchanged during this time despite ongoing economic uncertainties affecting construction markets.

However, project abandonments remain at historically high levels, with a 38.7% year-over-year increase from July 2024. On-hold activity declined 15.9% from a year earlier, while bid date delay rose by 3.2%.

The overall Project Stress Index decline over the past three months reflects falling on-hold and bid date delay activity, generally offsetting high levels of abandonments, Bell wrote.

“This counterbalancing dynamic has allowed the index to show improvement despite project cancelation levels being sustained above historic averages,” he wrote.

Looking specifically at July’s public sector abandonment data, activity remained elevated relative to levels seen in the same term last year, Bell wrote. This sustained elevation diverges from typical patterns where abandonment activity trails off in the second half of the year.

“The persistence of public sector abandonments is especially notable because public construction projects are traditionally more insulated from immediate market pressures,” he said. “Current economic conditions, including rising costs and policy uncertainty, may be influencing project decision-making.”

ConstructConnect will continue to monitor this development to determine if it represents a transitory adjustment or reflects more permanent changes in policy directives compared to prior administrations, Bell wrote.

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.