The Dodge Momentum Index (DMI) dropped 1.2% in August to 171.9 compared to July’s figure of 174.0. The Momentum Index measures monthly nonresidential building projects in planning. According to the Dodge Construction Network, the DMI is shown to lead construction spending for nonresidential buildings by a full year.
The Momentum Index states that commercial planning in August was led by an increase in hotel projects. However, fewer healthcare projects drove the institutional component lower.
The figures are lower compared to a year ago. In August 2021, the Momentum Index sat 14% higher, the commercial figure was 16% higher and the institutional component was 10% higher.
“Despite weak institutional planning activity, the Momentum Index remained elevated in August, just a notch below July’s 14-year high,” says Sarah Martin, senior economist for Dodge Construction Network. “This indicates continued confidence from owners and developers that nonresidential building projects will be realized in the coming year. Weaker economic conditions and rising interest rates, however, may grind down overall consumer and business confidence as we move into 2023 — translating into fewer nonresidential building projects breaking ground.”
The Dodge Construction Network says that 26 projects with a value of $100 million or more entered planning in August. The leading commercial projects were the $400 million Two Tower office building in Chicago, the $300 million phase 2 of the Sungate Logistics Park in Daytona Beach, Fla., and the $275 million Aligned Data Center in Sterling, Va.
The leading institutional projects were the $360 million Scripps Mercy Hospital expansion and the $275 million Triton Center redevelopment, both located in San Diego. Additionally, $275 million in improvements for Okemos Public Schools in Meridian Charter Township, Mich., went into planning since a bond measure for this project will appear on the local ballot in November.