Amid escalating construction costs and tariff uncertainty, development is increasingly being put on hold.
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Two reports released this week show the extent and pace at which projects are being stalled or put on ice.
A survey of 250 U.S.-based general contractors conducted last month by real estate and construction finance platform Built found that 35% of respondents had seen projects canceled or “significantly delayed” due to financing gaps.
Seventy percent of respondents said they have regularly faced delayed payments, leading contractors to inflate bids by an average of 8%. And 60% of contractors said they are concerned about tariffs compounding these issues.
Also in April, ConstructConnect found that the number of private developments placed on hold has increased 40% from last year, while the number of abandoned projects has jumped 14.1%, Construction Dive reported.
ConstructConnect's Project Stress Index, which measures construction projects that have been halted, abandoned or whose bid dates have been delayed, showed a 1.5% increase in April and was up 16% from 2021.
The Trump administration’s tariffs on most U.S. imports have placed new pressures on the costs of construction materials and have also made future costs less predictable.
In April, construction costs were 41.3% higher than in February 2020, according to an analysis of the Bureau of Labor Statistics’ producer price index report by the Associated Builders and Contractors. Multifamily construction inputs rose 0.8% from the year prior, while commercial construction rose 1.4%.
The U.S. has a 10% tariff on goods from most countries and a 25% tariff on aluminum and steel across the board. Last week, the Trump administration agreed to lower its 145% tariff on Chinese goods to 30% for 90 days.
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