The Dodge Momentum Index reached a 14-year high in June following a less than one percentage point increase from May’s reading of 173.1, according to Dodge Construction Network.
The Momentum Index is a monthly measure for nonresidential building project planning. The index is shown to lead construction spending for nonresidential buildings by a full year. In June, the commercial component of the Momentum Index rose 4.1%, while the institutional component fell 6.2%.
Dodge reported that construction planning in June was led by an increase in warehouse projects, while education projects decreased. June’s score was 9% higher than a year ago with commercial planning 11% higher and institutional planning 5% higher.
“A new cyclical high in the Momentum Index is a sign that developers feel that projects still have hope of moving forward, despite concerns of an impending economic slowdown,” said Richard Branch, chief economist for Dodge Construction Network. “However, this sentiment will be tested in the months to come as higher interest rates eat away at business and consumer confidence.”
According to Dodge, 27 projects with a value of more than $100 million entered the planning stage in June. The leading commercial projects were the $400 million Somerset Nevele Resort in Ellenville, N.Y., and the $300 million first phase of the Ten85 warehouse building in Buckeye, Ariz. The leading institutional projects were the $390 million 10 Twin Dolphin life science campus in Redwood City, Calif., and the $280 million expansion of the Connecticut Children’s Patient Tower in Hartford, Conn.