The Dodge Momentum Index fell 4.3% in September to 129.0 from its revised August reading of 134.8 (2000=100). The Momentum Index 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. The decline in September was the result of a 5.3% drop in institutional planning and a 3.6% decrease in commercial planning, retreating from the strong performance in August which benefitted from an influx of large projects ($100 million +) into planning.
| Dodge Momentum Index | |||
| (Year 2000=100) | |||
| Sep 16 | Aug 16 | % Change | |
| Dodge Momentum Index | 129.0 | 134.8 | -4.3% |
| Commercial Building | 135.5 | 140.6 | -3.6% |
| Institutional Building | 120.9 | 127.7 | -5.3% |
| Source: Dodge Data & Analytics | |||
September’s decline follows five consecutive months of gains for the Momentum Index, and resumes for now the saw-tooth pattern that’s often been present in the data since 2014. Even with the recent volatility on a month-to-month basis, the Momentum Index continues to trend higher, signaling that developers have moved plans forward despite economic and political uncertainty. With the September release the Momentum Index is 5.1% higher than one year ago. The institutional component is 5.4% above its September 2015 reading, while the commercial component is up 4.9%.
Credit: Dodge Data & Analytics
In September five projects entered planning each with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $200 million office tower in Chicago IL and a $150 million JW Marriott Hotel in Irvine CA. The leading institutional projects were a $150 million hospital in Evanston WY and a $105 million hospital in Salt Lake City UT.
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