Dodge Momentum Index slips in September
The Dodge Momentum Index retreated 0.8 percent in September compared to August, according to McGraw-Hill Construction. The Momentum Index is a monthly measure of the first report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.
The September Momentum Index came in at 94.7, down from a revised 95.4 in August and 96.7 in July. While the longer term trend is still viewed as positive, the Index appears to be experiencing a temporary pause, according to MHC officials. Uncertainty, particularly related to the impending presidential election and year-end expiration of the Bush tax cuts combined with automatic spending cuts (the "fiscal cliff"), is likely the main contributor to this short-term hesitation in future development plans, according to an October 5 MHC release.
The uncertainty seems to be weighing more heavily on the commercial segment of the Index, which dropped by 5.4 percent in September. Institutional building, by comparison, rose by 4.0 percent.