Public construction plans across the U.S. faced a sharp increase in project cancellations and delays in October, as the construction industry endured the first full month of the federal government’s unprecedented shutdown. According to fresh data from Cincinnati-based ConstructConnect, these funding disruptions pushed the Project Stress Index slightly higher after several months of declining strain.
The index — which tracks both delayed and abandoned construction projects — rose 1% between September and October. The metric now sits almost 4.9% above its 2021 baseline, said Devin Bell, assistant economist at ConstructConnect.
“The Project Stress Index rose this month following three consecutive months of decline in the index,” Bell told Construction Dive. “The rise was largely due to an increase in bid date delays with on-hold activity largely offsetting its impact.”
ConstructConnect’s report highlights how October’s disruptions reshaped project planning. Bid date delays jumped 8.5%, paired with a 1.9% increase in overall project abandonment. These pressures were partly counterbalanced by an 8.2% decline in projects being temporarily placed on hold — a sign that owners were less inclined to postpone work and more likely to cancel outright.
However, the most dramatic change occurred in the public sector. Agencies directly affected by frozen federal operations halted decisions, triggering a rapid escalation in canceled work. Bell said public project abandonments surged a staggering 45.8% year over year, alongside a 2.6% rise in public projects put on pause.
“External economic events have heavily influenced both private and public abandonment activity,” Bell said. “This was seen in October, with public project abandonment activity rising as the government was shut down for the whole month.”
Despite the heavy surge in public cancellations, the overall index remains below the mid-year spike tied to the post–Liberation Day tariff increase. This suggests a construction market that is strained but not collapsing under economic or political uncertainty. Private-sector activity shows that dynamic, with abandonment levels falling slightly in October and remaining relatively stable since tariffs were implemented. Projects placed on hold in the private sector plunged 68.9% compared to last year, signaling improved certainty around commercial development.
Overall, industrywide stress remains nearly flat compared to October 2024, rising just 0.4%. Yet Bell cautioned that cost pressures and evolving government funding will continue to challenge both timelines and viability: public bidding may not fully stabilize without clarity on long-term federal commitments.
The government finally reopened on Nov. 13 through a temporary spending bill that funds agencies through January 2026. Because the restart came mid-month, its effects will not show up in ConstructConnect’s data until the next reporting cycle. With agencies now able to resume contract approvals, November and December may reveal whether stalled projects return, or if cancellations become permanent.
Originally reported by Sebastian Obando in Construction Dive.
