Tariff Woes Drive 41% Increase In Construction Project Abandonments
Tariffs have become a major drag on the U.S. construction industry, and more developers have been walking away from projects.
ConstructConnect’s Project Stress Indicator, an index tracking project delays and abandonments, reached 125.7 at the end of November, up 19.9% from the prior month and 9.9% year-over-year. This is the highest the indicator has been since a spike in July.
The increase is almost entirely attributable to project abandonments, which jumped 41.1% month-over-month, ConstructConnect associate economist Devin Bell said in a blog post.
“Tariffs have played a key role in defining abandonment activity across both the public and private sectors this year,” he 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.”
Private project abandonments were up 5.7% year-over-year at the end of last month, while the same metric for the public sector was down 3.2%.
ConstructConnect also tracked a 16.5% increase in project holds compared to October.
While this data shows more projects being abandoned and delayed, some developers have still moved forward with megaprojects this year, particularly in the data center and manufacturing sectors.
Those types of projects contributed to a 21% increase in construction starts in October, according to a report from Dodge Construction Network.
The construction data firm found that 10 of those projects were worth more than $1B, including the $7.5B Meta Hyperion data center in Richland Parish, Louisiana, and the $1.7B Eli Lilly manufacturing facility in Lebanon, Indiana.
But Dodge tracked a 15% drop in residential construction nationwide. Single-family home starts increased by 2%, while multifamily groundbreakings dropped by 39%.
