The Dodge Momentum Index increased 3.1% in January to 139.4 (the year 2000 = 100) from the revised December reading of 135.2. The commercial component of the Momentum Index moved 9.9% higher, offsetting an 11.7% decrease in the institutional component.

January’s increase marked the highest level in the Momentum Index since the COVID-19 pandemic began. While certainly positive news, the Momentum Index is also sending a warning that the construction sector’s recovery may be very uneven in the months ahead. Institutional planning hit its lowest level since the Momentum Index began in 2002 as state and local governments pull back on building plans in the wake of growing budget deficits. Conversely, commercial planning is at its highest level since before the Great Recession, fueled by an increasing number of warehouse projects and, to a somewhat lesser degree, office projects. On a year-over-year basis, the overall Momentum Index is 2.2% below January 2020. The commercial component is up 12.3% year-over-year, while the institutional component is down 27.7%.

In January, 13 projects, each with a value of $100 million or more, entered planning. The leading commercial projects were a $420 million Walmart distribution center in Lancaster, Texas, and a $355 million Amazon warehouse (Project Roxy) in Arlington, Wash. The leading institutional projects were the $175 million Norman Regional Healthplex expansion in Norman, Okla., and the $156 million Mercy Health Hospital in Kings Mills, Ohio.

The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.