After a slow start to the year, construction spending and nonresidential building projects are picking up some steam, according to McGraw Hill Financial.
The Dodge Momentum Index, a monthly measure of the first report for nonresidential building projects in planning, advanced 8.4 percent in April to 123.0. The Momentum Index had retreated in February and March, following mostly steady gains in 2013.
With the April increase, the Momentum Index is up 17.8 percent compared to the same month a year ago. A harsh winter is believed to have slowed overall economic growth through the first quarter of 2014, but prospects for commercial development are again showing improvement, as reflected by the growing volume of projects at the planning stage and strengthening market fundamentals such as occupancy rates and rents.
Commercial was the stronger of the two segments in the Index, climbing 12.1 percent from March. Several office buildings and hotels—a $300 million headquarters for Toyota in Plano Texas, a $260 million convention center hotel in Seattle, and a $200 million Waldorf Astoria hotel in Los Angeles—were among the larger commercial projects to enter planning in April.
The institutional segment of the Momentum Index, meanwhile, rose 3.9 percent in April, marking its first monthly increase since January. A small increase in plans for educational buildings moderated the overall increase for institutional buildings and offset a stronger gain for healthcare projects.