diff --git a/packages/gatsby/src/state-machines/develop/actions.ts b/packages/gatsby/src/state-machines/develop/actions.ts
index 56fc89edb4ae3..fd278117881e5 100644
--- a/packages/gatsby/src/state-machines/develop/actions.ts
+++ b/packages/gatsby/src/state-machines/develop/actions.ts
@@ -129,6 +129,20 @@ export const finishParentSpan = ({ parentSpan }: IBuildContext): void =>
 
 export const saveDbState = (): Promise<void> => saveState()
 
+export const logError: ActionFunction<IBuildContext, AnyEventObject> = (
+  _context,
+  event
+) => {
+  reporter.error(event.data)
+}
+
+export const panic: ActionFunction<IBuildContext, AnyEventObject> = (
+  _context,
+  event
+) => {
+  reporter.panic(event.data)
+}
+
 /**
  * Event handler used in all states where we're not ready to process a file change
  * Instead we add it to a batch to process when we're next idle
@@ -158,4 +172,6 @@ export const buildActions: ActionFunctionMap<IBuildContext, AnyEventObject> = {
   markSourceFilesClean,
   saveDbState,
   setQueryRunningFinished,
+  panic,
+  logError,
 }
diff --git a/packages/gatsby/src/state-machines/develop/index.ts b/packages/gatsby/src/state-machines/develop/index.ts
index 780451562e3f5..62e690ac2f496 100644
--- a/packages/gatsby/src/state-machines/develop/index.ts
+++ b/packages/gatsby/src/state-machines/develop/index.ts
@@ -45,6 +45,9 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
           target: `initializingData`,
           actions: [`assignStoreAndWorkerPool`, `spawnMutationListener`],
         },
+        onError: {
+          actions: `panic`,
+        },
       },
     },
     // Sourcing nodes, customising and inferring schema, then running createPages
@@ -77,6 +80,10 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
           ],
           target: `runningQueries`,
         },
+        onError: {
+          actions: `logError`,
+          target: `waiting`,
+        },
       },
     },
     // Running page and static queries and generating the SSRed HTML and page data
@@ -126,6 +133,10 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
             target: `waiting`,
           },
         ],
+        onError: {
+          actions: `logError`,
+          target: `waiting`,
+        },
       },
     },
     // Recompile the JS bundle
@@ -136,6 +147,10 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
           actions: `markSourceFilesClean`,
           target: `waiting`,
         },
+        onError: {
+          actions: `logError`,
+          target: `waiting`,
+        },
       },
     },
     // Spin up webpack and socket.io
@@ -150,6 +165,10 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
             `markSourceFilesClean`,
           ],
         },
+        onError: {
+          actions: `panic`,
+          target: `waiting`,
+        },
       },
     },
     // Idle, waiting for events that make us rebuild
@@ -183,6 +202,10 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
           actions: `assignServiceResult`,
           target: `recreatingPages`,
         },
+        onError: {
+          actions: `panic`,
+          target: `waiting`,
+        },
       },
     },
     // Almost the same as initializing data, but skips various first-run stuff
@@ -217,6 +240,10 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
           ],
           target: `runningQueries`,
         },
+        onError: {
+          actions: `logError`,
+          target: `waiting`,
+        },
       },
     },
     // Rebuild pages if a node has been mutated outside of sourceNodes
@@ -230,6 +257,10 @@ const developConfig: MachineConfig<IBuildContext, any, AnyEventObject> = {
           actions: `assignServiceResult`,
           target: `runningQueries`,
         },
+        onError: {
+          actions: `logError`,
+          target: `waiting`,
+        },
       },
     },
   },