The Dodge Momentum Index decreased 0.9 percent in October compared to the previous month, according to McGraw Hill Construction, a division of McGraw Hill Financial. The Momentum Index 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.
October’s decline brought the Momentum Index to 115.3 (2000=100), down from September’s 116.4, although still well above the reading of 90.8 registered at the end of last year, according to the latest report from McGraw Hill.
The report suggests that the October drop “may be just a brief departure from the broader trend, in this case the steady improvement shown by the Momentum Index from December 2012 through this September.”
“At the same time, it may well be a sign of renewed caution on the part of developers, given the uncertainty about the political and economic environment stemming from the October government shutdown and the debt ceiling deliberations,” writes McGraw Hill.
The October Momentum Index also showed that new plans for commercial buildings dropped 2.1 percent while institutional building plans held steady. On the commercial side, a large decline in plans for new offices and stores outweighed strong gains for new hotel development.