Momentum Index Climbs in October as Optimism Persists Despite Economic Headwinds

The Dodge Construction Network’s monthly Dodge Momentum Index (DMI) improved by 9.6% in October to 199.7 from September’s reading of 182.2. The increase indicates that optimism from owners and developers remains strong despite economic concerns looming over the industry, says Sarah Martin, senior economist for the Dodge Construction Network.

The DMI is a monthly measure of the initial report for nonresidential building projects in planning. The measure is shown to lead construction spending for nonresidential buildings by a full year.

According to the DMI, the commercial component increased by 13% and the institutional component rose by 2.9%. Compared to October 2021, this year’s October DMI reading is 28% higher, the commercial component is up 29% and institutional planning is 25% higher.

“The sustained upward trajectory in the Momentum Index shows optimism from owners and developers that projects will continue to move forward, even with rising concerns of an economic recession,” says Martin. “Specific nonresidential segments, such as data centers and life science laboratories, have thrived in 2022 and continue to support strength in planning activity. As we move into next year, however, labor and supply shortages, high material costs and high-interest rates will likely temper planning activity back to a more moderate pace.”

Commercial planning was supported by an increase in office and hotel projects. The institutional component experienced growth in recreational and education projects but was countered by a decline in the number of healthcare and public planning projects.

A total of 15 projects with a value of $100 million or more entered planning in October. The leading commercial projects included a $206 million expansion to the M Resort in Henderson, Nev., and the second phase of the $180 million 1416 Dodge Office Towers in Omaha, Neb. The leading institutional projects comprised the $500 million uCity Square Lab & Office Complex in Philadelphia and the $294 million life science R&D laboratory complex in San Carlos, Calif.

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