The Dodge Momentum Index (DMI) concluded 2022 with a 6.6% increase in December to 222.2 from November’s reading of 208.3. The Dodge Construction Network (DCN) reports that the commercial component of the DMI rose 8.4%, and the institutional component rose 2.7%.
The DMI is a monthly measure of the initial report for nonresidential building projects in planning, shown to lead construction spending for nonresidential buildings by a full year.
The catalyst for the increase is the optimism surrounding nonresidential growth, says Richard Branch, chief economist for DCN.
“While some of that will likely erode in 2023 as economic growth wanes, increased demand for some building types like data centers, labs and healthcare buildings will provide a solid floor for the construction sector,” he says.
Commercial planning in December was supported by broad-based increases across office, warehouse, retail and hotel planning. Institutional growth focused on recreation and public building, with education and healthcare planning activity remaining flat. On a year-over-year basis, the DMI was 40% higher than in December 2021; the commercial component was up 51%, and institutional planning increased 20%.
A total of 15 projects valued at $100 million or more entered planning in December. The leading commercial projects included a $500 million Vantage Data Center in Sterling, Va., and a $183 million mixed-use building in Chicago. The leading institutional projects comprised the $400 million Acute Neuropsychiatric Hospital in Los Angeles and a $185 million life sciences building in Philadelphia.