Stress in the construction sector continued to grow in April, driven largely by rising delays and cancellations in the private development market, according to new data from Cincinnati-based construction analytics firm ConstructConnect.

The company's Project Stress Index, which tracks the number of construction projects that have been paused, canceled or have experienced bidding delays, rose by 1.5% in April, marking a 16% increase over 2021 baseline levels. That metric reflects growing uncertainty across the industry, particularly in privately funded construction.

“Stress on private projects has largely diverged from the public sector,” said Devin Bell, associate economist at ConstructConnect. “The private sector has been very quick to feel the shock of recent changes to the country’s economic outlook, with on-hold and abandonment activity up sharply in recent months. Conditions within the public sector remain far more muted.”

In April, the uptick in stress was driven primarily by a 4.6% increase in delayed bid activity and a 1.5% rise in abandonment rates, Bell said. The only slight relief came from a 2% decrease in projects placed on hold, but that drop was not enough to offset the broader upward pressure on the index.

Over the past 12 months, the trends in private development have been particularly striking. Private projects placed on hold have soared by 40%, while abandonments have climbed 14.1%, underscoring how economic conditions — including inflation, high interest rates and labor concerns — are hampering investor confidence.

“Abandonment activity continues to be a major force within the construction climate,” Bell said, emphasizing the contrast between public and private jobs. “Both sectors experienced increases in abandonments in April with the private sector nearing a multi-year high. High interest rates, potentially raised material costs and a tumultuous labor market are sapping the confidence of prospective owners and developers.”

By contrast, public sector construction has remained more resilient. According to ConstructConnect’s data, the number of public projects placed on hold dropped 29% year over year, and abandonments in the sector have remained largely unchanged, suggesting that government-funded work is less susceptible to recent economic pressures.

Even with the latest increase, however, the overall Project Stress Index is still 6.5% lower than it was in April 2024, indicating that while project cancellations and delays are once again climbing, they haven’t yet reached the peaks seen earlier this year.

Still, analysts warn that uncertainty in private development may persist through the summer as the construction industry awaits signs of cooling inflation, possible interest rate adjustments from the Federal Reserve, and relief in material and labor costs.

Originally reported by Sebastian Obando in Construction Dive.