The Dodge Momentum Index moved 4.0% higher in June to 146.1 (2000=100) from the revised May reading of 140.5. 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. The June increase for the Momentum Index reflected a 6.1% jump by its institutional component and a 2.4% gain by its commercial component.
Despite the improvement shown by the Momentum Index in June, planning for commercial and institutional building projects has clearly stepped back from the torrid pace set during the first half of 2018. Indeed, the average of the overall Momentum Index through the first six months of 2019 was 4.3% lower than the same period a year ago, with the commercial component down 5.2% and the institutional component down 3%. What June’s improvement does affirm is that the broader pullback by the Momentum Index remains gradual, and that there are still ample projects at the planning stage to maintain stability for construction spending in the near term.
In June, there were 17 projects each with a value of $100 million or more that entered planning. The leading institutional projects were a $375 million detention facility in Mount Clemmons, MI, and the $360 million Dignity Health Dominican Hospital in Santa Cruz, CA. The leading commercial projects were the $250 million Seaport Square office building in Boston, MA and a $200 million warehouse in Suffolk, VA.