WASHINGTON, D.C.—With the new fiscal year set to begin Oct. 1, Congress is under pressure to pass a continuing resolution (CR) to avoid a federal government shutdown. The Trump administration has proposed a CR to extend current funding through Jan. 31, 2026. While negotiations continue, the construction industry faces growing uncertainty.

None of the 12 annual appropriations bills have been enacted. Without a stopgap measure, federal agencies could partially shut down Oct. 1. Key sticking points include the length of the CR, potential policy riders, and whether emergency funding for disaster relief and infrastructure will be included.

For the construction sector, the consequences of a shutdown would be immediate and far-reaching:

• Project delays: Federally funded infrastructure projects could be halted or slowed due to a lack of agency oversight, payment disruptions, or paused grant disbursements.
• Permit and review bottlenecks: Agencies such as the Army Corps of Engineers, EPA, and DOT may suspend environmental reviews and permitting, delaying project starts.
• Contracting uncertainty: Federal agencies may postpone bidding opportunities, suspend new contracts, or delay payments to existing contractors—affecting cash flow and planning.
• Workforce impacts: Delays can ripple through local economies, leading to layoffs or reduced hours for workers employed on federally supported projects.

Even under a CR, uncertainty in long-term funding complicates project planning, hiring, and investment. The risk of rolling short-term extensions further undermines confidence in federal infrastructure initiatives.

Congress has until midnight Sept. 30 to pass a CR and avoid these disruptions. ABMA is closely monitoring the negotiations and continues to advocate for stability and full-year funding to keep critical construction and infrastructure projects on track.

The Bigger Picture for Construction and Housing

For material dealers, a shutdown is one more pressure on an already struggling construction sector. New housing starts remain largely flat, while applications for new permits are down by double digits. Taken together with the possibility of federal disruptions, this picture spells real trouble for the near-term outlook.

ABMA Perspective: Preparing for What Comes Next

While short-term risks dominate headlines, there are signs of a pivot in federal policy. Our lobbyist, Jim Thompson, reports that the White House will be shifting its focus to housing policy this fall—seeking reforms to spur new home construction and improve affordability. ABMA is already preparing proposals to support that effort.

We are advancing policy ideas around permitting reform, including “shot clocks” to guarantee timely inspections and approvals, as well as self-certification options for building permits. At a recent LBM Executive Council event, Greg Brooks shared an eye-opening statistic: on average, 25% of the cost of a new home comes from permitting and navigating government approvals. Reducing those costs could make an immediate difference for both builders and buyers.

Our hope is that by improving the shovel-ready process and combining those reforms with the anticipated federal rate cut, consumers will move off the sidelines and back into the housing market. The result would not just support new construction but also help stabilize the broader economy and provide a bright future for the many small and family-owned businesses in the lumber and building materials sector.