The Dodge Momentum Index rose 2.4 percent in May to 119.4, according to Dodge Data & Analytics. The increase was due to a 6.5-percent gain for projects entering planning in the commercial sector, which offset a 3.4-percent decline in the institutional segment.
The 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.
“May’s increase places the overall index 3.6-percent higher than its year-ago level, suggesting further growth in construction activity in 2016 despite the subdued first quarter GDP report and signs that lending standards are beginning to tighten for commercial projects,” a release from Dodge reads.
The commercial portion of the index rose in May for the second consecutive month and is at its highest level since September 2015.
“This recent improvement for commercial projects provides some evidence that construction plans are moving forward after the severe drop-off in planning that occurred with the financial market instability in late 2015,” according to Dodge.
Institutional planning is 1.3-percent lower than it was in May 2015, settling back from the heightened activity reported in late 2015 and early 2016.
In May, six projects entered planning with a value that exceeded $100 million.