Dodge Momentum Index reaches 14-year high

The Dodge Momentum Index increased less than one percentage point in June to 173.6 from a revised May reading of 173.1, pushing the measure to a 14-year high.

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

In June, the commercial component of the momentum index rose 4.1 percent, while the institutional component fell 6.2 percent, according to Dodge.

Commercial planning in June was led by an increase in warehouse projects, while most other commercial buildings were flat. For institutional planning, a decrease in education projects in June dragged the sector lower, while health care increased.

Year over year, the momentum index was 9 percent higher versus June 2021. The commercial component was 11 percent higher, and the institutional component was 5 percent higher than a year earlier.

Specific projects

A total of 27 projects with a value of $100 million or more entered planning in June.

The leading commercial projects were the $400 million Somerset Nevele Resort in Ellenville, New York, and the $300 million first phase of the Ten85 warehouse building in Buckeye, Arizona.

The leading institutional projects were the $390 million 10 Twin Dolphin life science campus in Redwood City, California, and the $280 million expansion of the Connecticut Childrens Patient Tower in Hartford, Connecticut.

“A new cyclical high in the momentum index is a sign that developers feel that projects still have hope of moving forward, despite concerns of an impending economic slowdown,” says Richard Branch, chief economist at Dodge Construction Network. “However, this sentiment will be tested in the months to come as higher interest rates eat away at business and consumer confidence.”