Dodge Momentum Index slips to start 2023

Dodge Construction Network’s Dodge Momentum Index (DMI) fell 8.4 percent in January to 201.5.

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

In January, the commercial component of the DMI fell 10 percent and the institutional component receded 4.7 percent.

“The Dodge Momentum Index weakened in January, after 10 consecutive months of gains,” says Sarah Martin, associate director of forecasting at Dodge Construction Network. “While planning activity slowed, the index remains elevated and the volume of projects remains steady. After such strong growth in 2022, we expect the index to work its way back toward historical norms this year, in tandem with weaker economic growth.

“Overall, levels of planning activity remained comparatively strong over the month, which bodes well for the construction sector,” Martin adds.

Weakness in commercial planning in January was broad based, Dodge Construction Network says, with office, warehouse, retail and hotel activity declining. Slower activity in education and amusement projects drove down the institutional portion of the index, nullifying the impact of gains in health care and public planning over the month.

On a year-over-year basis, the DMI is 32 percent higher than it was in January 2022. The commercial component is up 40 percent year over year, and the institutional component is 16 percent higher.

Specific projects

A total of 26 projects with a value of $100 million or more entered planning in January, Dodge Construction Network says.

The leading commercial projects were the $325 million Westfield Data Center in Westfield, Massachusetts and the $275 million Illinois Medical District Data Center in Chicago. The leading institutional projects were the $315 million USC Discovery and Translational Hub laboratory building in Los Angeles and the $211 million Granary Lab & Office Building in Salt Lake City.