Nonresidential building slips for third straight month

The Dodge Momentum Index that measures nonresidential building projects dropped another 0.6 percent in October, according to McGraw-Hill Construction. The index retreated for the third consecutive month, this time to 93.3, after peaking at 96.0 in July.

McGraw-Hill Construction attributes the recent loss of momentum in part to the high degree of uncertainty affecting the U.S. economy and the construction industry, reflecting the U.S. presidential election and the looming fiscal cliff. In addition, plans for institutional building projects were particularly strong in recent months, but that strength dissipated in October given the continued tight budget conditions states and localities face.

The drop in the October index was due entirely to a 1.3 percent decline in its institutional segment. In particular, the volume of publicly financed construction projects eased as fewer large-scale healthcare projects entered the planning phase.