Dodge Momentum Index dips in November 2021

The Dodge Momentum Index fell 4 percent in November to 171.7, down from the revised October reading of 178.1.

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

In November, commercial planning fell 8 percent while institutional planning moved 5 percent higher.

The value of nonresidential building projects continues to alternate between a month of gains, followed by a loss. Since the pandemic began, nonresidential building projects entering planning have been more volatile than in past cycles, likely driven by increased challenges from higher prices and lack of labor.

Despite these issues and a lack of underlying demand for some building types, such as offices and hotels, the index remains near a 14-year high. Compared to November 2020, the Momentum Index was 44 percent higher this November, with commercial planning up 45 percent from a year ago and institutional up 41 percent in that time.

Specific projects

A total of 10 projects with a value of $100 million or more entered planning in November.

The leading commercial projects were a $240 million Seefried Industrial Properties warehouse in Mesa, Arizona, and a $158 million Prologis warehouse in Lebanon, Tennessee. The leading institutional projects were the $450 million Wake Forest Baptist Medical Center in Winston-Salem, North Carolina, and the $241 million Hoboken High School in Hoboken, New Jersey.

Planning data continues to suggest a healthy level of construction growth to come in 2022. However, due to higher prices and shortages of labor, actual growth is expected to be modest. The new omicron variant for COVID-19, and its potential impact on economic growth, highlights the tremendous uncertainty the construction sector will face throughout the coming year.