Dodge Momentum Index Climbs in October
The Dodge Momentum Index, issued by Dodge Construction Network, improved 9.6 percent in October to 199.7 from the revised September reading of 182.2. During the month, the DMI continued its steady ascent, with the commercial component rising 13 percent, and the institutional component ticking up 2.9 percent. The DMI is a monthly measure of the initial report for nonresidential building projects in planning, shown to lead construction spending for nonresidential buildings by a full year.
Commercial planning was bolstered by a solid increase in office and hotel projects. The institutional component was varied, experiencing growth in recreational and education projects, countered by a decline in the number of healthcare and public planning projects. On a year-over-year basis, the DMI was 28 percent higher than in October 2021, the commercial component was up 29 percent, and institutional planning was 25 percent higher.
A total of 15 projects with a value of $100 million or more entered planning in October. The leading commercial projects included a $206 million expansion to the M Resort in Henderson, Nevada, and the second phase of the $180-million 1416 Dodge Office Towers in Omaha, Nebraska. The leading institutional projects comprised of the $500-million uCity Square Lab & Office Complex in Philadelphia, and the $294-million life science R&D laboratory complex in San Carlos, California.
What this data means
“The sustained upward trajectory in the Momentum Index shows optimism from owners and developers that projects will continue to move forward, even with rising concerns of an economic recession,” says Sarah Martin, senior economist for Dodge Construction Network. “Specific nonresidential segments, such as data centers and life science laboratories, have thrived in 2022 and continue to support strength in planning activity. As we move into next year, however, labor and supply shortages, high material costs and high interest rates will likely temper planning activity back to a more moderate pace.”