Project abandonments surged 10.7% in the past month, according to Cincinnati-based ConstructConnect’s Project Stress Index, which measures paused, abandoned, or delayed construction projects.
“Among abandoned projects, it is very possible that this number is being fueled by only a few severely impacted subcategories,” said Michael Guckes, chief economist at ConstructConnect. “Chief among suspects are private offices which continue to gravely struggle against current financial market conditions.”
The latest data highlights differences between public and private construction projects.
Private projects put on hold fell by about 11.5% year over year.
Public projects put on hold, including infrastructure work, increased by 5.2%.
Despite the overall decrease, developers in Boston paused work on a life sciences project due to an oversupply of space and slow demand. Leggat McCall Properties began work in 2022 but halted activity due to market conditions. Similarly, LG Energy Solutions temporarily paused part of its $5.5 billion battery manufacturing complex in Arizona, citing market conditions.
Public project abandonments increased by 3.6% year over year, while private project abandonments soared by 48.7%.
“Public abandonments are near 2021 levels, which is a relief in today’s volatile construction economy,” said Guckes. “Unfortunately, in the private realm, abandonments continue to be a significant problem for contractors who will find it hard to manage workflows and keep their crews busy while being subject to the risk of projects being abandoned.”
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