April’s Dodge Momentum Index Shows Effects of COVID-19
May 10, 2020
The Dodge Momentum Index moved 6.0 percent lower in April to 135.9 (2000=100) from the revised March reading of 144.5. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first, or initial, report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. Both components of the Momentum Index pulled back during the month―the commercial component fell 7.6 percent, while the institutional component dropped 3.2 percent.
COVID-19 had a significant negative impact on the economy in April, touching virtually all sectors― including construction. Planning activity clearly downshifted, although that downshift has not been fully realized in the published index since the Momentum Index is a three-month moving average. This sets the stage for an even weaker reading when the May data is released in June, say analysts.