The Dodge Momentum Index (DMI) fell 8.4% in January to 201.5, down from December’s score of 220.0. Sarah Martin, associate director of forecasting for Dodge Construction Network, explains the organization expected a return to normal following strong growth in 2022.
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.
For January, the commercial component of the DMI fell by 10.0%, and the institutional component receded by 4.7%.
“The DMI weakened in January after 10 consecutive months of gains,” says Martin. “While planning activity slowed, the Index remains elevated, and the volume of projects remains steady. After such strong growth in 2022, we expect the Index to work its way back towards historical norms this year, in tandem with weaker economic growth. Overall, levels of planning activity remained comparatively strong over the month — which bodes well for the construction sector.”
January’s data reports a slowdown in commercial planning across various sectors, including offices, warehouses, retail and hotels. Slower activity in education and amusement projects drove down the institutional portion of the DMI. On a year-over-year basis, the DMI remains 32% higher than in January 2022. The commercial component was up 40%, and the institutional component was 16% higher.
There were 26 large-scale projects worth $100 million or more that entered the planning stage in January. Some top commercial projects included the Westfield Data Center in Massachusetts, valued at $325 million, and the Illinois Medical District Data Center in Chicago, valued at $275 million. On the institutional front, the leading projects included the USC Discovery and Translational Hub laboratory building in Los Angeles, worth $315 million, and the Granary Lab and Office Building in Salt Lake City, worth $211 million.