The Dodge Momentum Index moved slightly higher in July, increasing 0.5% to 134.7 (2000=100) from its revised June reading of 134.1. 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. July’s modest rise follows a substantial increase in June, which saw the Momentum Index climb 10.9% from the previous month. The Index has now moved higher in four consecutive months, the first such string of increases since late 2014.
July’s improved pace was due to slight gains for each of the two major sectors, with institutional planning up 0.7% and commercial planning up 0.4%. The recent rise in the Index from April through July suggests that planning for construction projects is progressing, albeit in an uneven pattern, despite concerns over the subdued rate of economic growth.
In July, 11 projects entered planning with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $200 million mixed-use project in Sugar Land, Texas, and a $161 million office in Fremont, Calif. The leading institutional projects were a $177 million hospital tower in Chapel Hill, N.C. and a $138 million hospital in Atlanta.