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Dodge Momentum Index pulls back in July 2021

By |  August 13, 2021

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The Dodge Momentum Index fell to 155.8 in July, a 6 percent decline from the revised June reading of 164.9.

The momentum index, issued by Dodge Data & Analytics, is a monthly measure of the first report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

Both components of the momentum index fell in July. Commercial planning fell 3 percent, while institutional planning dropped 9 percent.

The details

The momentum index posted strong gains through much of the winter and spring as the economy and building markets began to stabilize following the recession.

While the economy has continued its forward progress through the summer, Dodge Data says the momentum index has regressed somewhat as higher materials prices and shortages of skilled labor continue to exert a strong influence over construction.

Despite the declines in June and July, the momentum index remains near levels last seen in 2018. Compared to a year earlier, Dodge Data says the momentum index was 25 percent higher than in July 2020. Institutional planning was up 27 percent, and commercial planning was 25 percent higher than last year.

Projects

A total of 11 projects with a value of $100 million or more entered planning in July. The leading commercial projects were a $240 million Microsoft data center in San Antonio and a $200 million Amazon fulfillment center in Woodburn, Oregon. The leading institutional projects were the $225 million Baptist Health Hardin Medical Pavilion in Elizabethtown, Kentucky, and the $200 million AdventHealth Narcoossee campus in Orlando, Florida.

The pressures caused by higher materials prices and labor are unlikely to ease anytime soon, according to Dodge Data. When added to the rising number of COVID-19 cases caused by the Delta variant, the firm has concerns that the nascent recovery in construction may stall in the coming months.

Kevin Yanik

About the Author:

Kevin Yanik is the editor-in-chief of Pit & Quarry magazine. Yanik can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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