Dodge Momentum Index back up in September 2021

By Jack Kopanski| October 12, 2021

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The Dodge Momentum Index gained 11 percent in September, up to 164.9 – and up nearly 17 percent from August’s revised reading of 148.

The momentum index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have shown to lead construction spending for nonresidential building by a full year.

Commercial planning grew by 13 percent in September, Dodge Construction says, while institutional planning rose 8 percent.

Dodge Construction says that nonresidential building projects entering planning saw a solid recovery early this year as the economy began to bounce back from a pandemic-induced slump. Going into the summer, those gains turned to losses as material prices increased and shortages of labor and goods impacted the construction sector.

The strength of projects entering planning was widespread during the month, according to Dodge Construction, with most sectors – excluding health care – seeing increases.

On a year-over-year basis, the momentum index is 30 percent higher than in September 2020. Commercial planning is up 32 percent since a year ago, and institutional planning is up 25 percent in that time.

A total of 17 projects with a value of $100 million or more entered planning in September. The leading commercial projects were the $500 million “The Star” office building in Los Angeles and a $250 million office project in Cambridge, Massachusetts. The leading institutional projects were the first and third phases of a lab facility in Boston, valued at $450 million and $225 million, respectively.

Dodge Construction says the gain in the momentum index and its components is good news, as well as a sign that owners and developers are looking past the current concerns over pricing, the COVID-19 delta variant and politics. The firm adds that this growth does not mean there are no problems ahead for the sector and that month-to-month volatility in the data is likely to remain for some time.