Nonresidential building growth takes a sudden dip

The Dodge Momentum Index, a monthly measure of the first report for nonresidential building projects in planning, slipped 0.9 percent in October compared with the previous month, according to McGraw Hill Construction. October’s decline brought the momentum index to 115.3 – down from September’s 116.4.

According to McGraw Hill Construction, this retreat may simply be a brief departure from the steady improvement nonresidential building projects in planning have shown since December 2012. At the same time, McGraw Hill Construction indicates that this dip may be a sign of renewed caution on the part of developers. The firm cites uncertainty about the political and economic environment stemming from the October government shutdown, as well as debt ceiling deliberations, as potential sources impacting nonresidential building.

Specifically, commercial building plans dropped 2.1 percent while institutional building plans held steady. On the commercial side, a large decline in plans for new offices and stores outweighed gains for new hotel development, according to McGraw Hill Construction.