Dodge Momentum Index drops 8 percent in March

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, slipped 8.6 percent in March to 183.7 from a revised February reading of 201.

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

In March, the commercial component of the index fell 6.6 percent and the institutional component decreased 12.9 percent.

“We are predicting the Dodge Momentum Index to work its way back to historical norms throughout 2023, concurrent with weaker economic conditions,” says Sarah Martin, associate director of forecasting at Dodge Construction Network. “Lending standards for small banks in particular have substantially tightened as banking insecurity intensifies. As a result, owners and developers are more likely to pull back in the short-term, which would further contract the DMI as we continue into the year.”

Commercial planning in March was driven down by fewer projects in the office and warehouse sectors, according to Dodge, decreasing 29 percent and 11 percent, respectively. Institutional planning weakened more substantially, as health care fell 17 percent, education dipped 6 percent and amusement planning activity dropped 14 percent.

A steady flow of research and development laboratories entered the queue, supporting the otherwise weakening sector, Dodge says. Year over year, the momentum index remains 24 percent higher than in March 2022. The commercial component is up 37 percent, and the institutional component is 2 percent higher.

Specific projects

A total of 18 projects with a value of $100 million or more entered planning in March, Dodge reports.

The leading commercial projects are a $300 million office building in Chicago and the $215 million 58 Logistics Center Industrial Park warehouse project in Bakersfield, California.

Two projects at UT Southwestern in Dallas led the institutional sector: the $425 million School of Public Health & Health Professions building and the $348 million rehabilitation hospital.