A new wave of tariff-driven cost increases is sending shockwaves through the construction industry, with fresh data from ConstructConnect showing a sharp jump in project stress levels heading into the end of 2025. The firm’s Project Stress Index — which tracks abandoned, delayed, or postponed construction projects — recorded a steep rise in November as companies exhausted materials purchased before tariff implementation.
According to Cincinnati-based ConstructConnect, the index increased 19.9% from October to November, pushing total stress activity roughly 25.7% above its 2021 baseline. Associate economist Devin Bell said the impact of tariffs has been especially pronounced this year as supply buffers run dry.
“Tariffs have played a key role in defining abandonment activity across both the public and private sectors this year,” Bell told Construction Dive. “As companies deplete their pre-Liberation Day stockpiles months after initial tariffs took effect, rising construction costs are pushing some owners and developers toward project cancellations. This pressure is already visible in elevated private sector abandonments, and both sectors continue to run well above their historic averages.”
The data shows a dramatic 41.1% surge in project abandonments in November — one of the sharpest monthly increases of the year. Projects placed on hold also grew significantly, up 16.5%, signaling that owners are pausing plans as budgets become harder to control.
Bid date delays were the only metric to improve, slipping 2.9%, a modest reversal after rising in prior months.
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ConstructConnect’s analysis highlights a widening gap between public and private project activity:
The divergence suggests that public-sector programs — often backed by more stable budgets or long-term funding — may be better insulated from short-term cost swings. Private developers, by contrast, are pulling back as financing tightens and materials remain expensive.
Bell said the pattern is likely to continue into next year.
“Both on-hold and abandonment activity increased substantially, pushing the index to its highest level since the spike in June,” he said. “Rising material and operational costs have intensified the economic uncertainty facing the construction industry, driving stress indicators upward.”
Overall stress levels now sit 9.9% higher than this time in 2024, suggesting more turbulence ahead for contractors, developers, and suppliers.
As tariff-related cost escalation ripples through the market, many firms face tough decisions: pause projects, scale them back, or cancel altogether. With financing conditions expected to remain tight well into 2026, industry observers warn that project viability will likely stay under pressure for months to come.
Originally reported by Sebastian Obando in Construction Dive.
