Dodge Momentum Index slides in August

By |  September 8, 2023

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Dodge Construction Network’s Dodge Momentum Index (DMI), a monthly measure of the initial report for nonresidential building projects in planning, declined 6.5 percent in August.

The DMI is down to 178 from a revised July reading of 190.3.

According to Dodge, the commercial component of the DMI fell 1.6 percent in August while the institutional component fell 14.8 percent.

“Overall activity remains above historical norms, but weaker market fundamentals continue to undermine planning growth,” says Sarah Martin, associate director of forecasting at Dodge Construction Network. “It’s likely that the full year of tightening lending standards and high interest rates has begun to affect institutional planning, which has otherwise been resistant to these market headwinds.”

“Also, planning in the sector continues to revert from the strong spike in activity back in May,” Martin adds. “As we move into the final four months of 2023, both commercial and institutional planning will continue to be constrained.”

DMI insights

As Dodge describes, August experienced a deceleration in education, health care and amusement planning activity. The combination fueled the sizable decline in the institutional sector.

Stronger hotel planning, meanwhile, offset weaker office activity, causing a milder regression in the commercial segment throughout August.

Year over year, the DMI is 4 percent higher than it was in August 2022. The commercial and institutional components are up 3 percent and 7 percent, respectively.

A total of 22 projects valued at $100 million or more entered planning in August, Dodge says. The largest commercial projects to enter planning were the $322 million fifth phase of the Northern Virginia Gateway Data Center in Fredericksburg, Virginia, and the $225 million Kroger’s Distribution Center in Las Vegas. The largest institutional projects to enter planning were the $420 million Westborough Life Sciences Park in Westborough, Massachusetts, and the $168 million Freeman Health System Hospital in Pittsburg, Kansas.

According to Dodge, the DMI has proven to lead construction spending for nonresidential buildings by a full year.

Related: Dodge Momentum Index dips in July

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About the Author:

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

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