The Dodge Momentum Index rose 2.4 percent in January to 126.4 (2000=100) from its December reading of 123.4. 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.
The increase in January was the result of a 3.3-percent increase in institutional projects, and a 1.6-percent increase in commercial projects, according to the latest Dodge Data & Analytics report. On a year-over-year basis, the overall Index is 1.7 percent higher even though the commercial portion is down 6.8 percent.
According to the report, commercial planning intentions started 2015 on an aggressive note before settling back by mid-year. Over the most recent few months commercial planning has been following a saw tooth pattern, but the overall trend has been positive as most commercial real estate fundamentals are improving. The institutional index on the other hand started 2015 on a weak note, but improved throughout the year and is now 14.0 percent higher than one year ago.
In January, ten projects entered planning with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $270 million convention center hotel in San Diego and a $140 million office and retail building in Atlanta. For the institutional building sector, the leading projects were a $160 million renovation and addition at a USDA lab in Athens, Ga., and a $150 million hospital expansion in Corpus Christi, Texas.