Dodge Construction Network reports the Dodge Momentum Index (DMI) rebounded in February following an 8.4% decline in January. February’s DMI increased by 1.9% to 203.0 from January’s reading of 199.3. In February, the commercial component of the DMI rose by 1.4%, and the institutional component increased by 2.9%.
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.
DMI’s associate director of forecasting, Sarah Martin, says the increase bolsters optimism that construction activity will grow in 2024.
“Owners and developers tend to put projects into planning until well after economic conditions weaken,” she says. “For example, the DMI did not substantially decline during the Great Recession until 2009. Therefore, the anticipated mild economic growth in 2023 could cause the DMI to moderate over the year, but it is unlikely to fall below historical norms.”
In the commercial sector, office planning and data center planning helped bolster growth. The DMI reports the sector grew 20% in February. Institutional planning growth was anchored in February by education and healthcare projects, notably research facilities. On a year-over-year basis, the DMI remains 43% higher than in February 2022. The commercial component was up 55%, and the institutional component was 22% higher.
A total of 22 projects with a value of $100 million or more entered planning in February. The leading commercial projects included the $500 million Northwestern Mutual Headquarters in Milwaukee and the $375 million Legacy Highlands warehouse and retail project in Beaumont, Calif. The leading institutional projects comprised the $500 million University of Michigan Residence and Dining Hall in Ann Arbor, Mich., and the $213 million Center of Innovation laboratory building in Emeryville, Calif.