Report: Good momentum for nonresidential projects in planning

The Dodge Momentum Index, a monthly measure of the initial report for nonresidential building projects in planning issued by Dodge Construction Network, rose 1.9 percent in February.

The Dodge Momentum Index now sits at 203.0, up from a revised January reading of 199.3.

According to Dodge, the commercial component of the index rose 1.4 percent in February while the institutional component made a 2.9 percent gain.

“The Dodge Momentum Index returned to growth in February after falling 9 percent [in January],” says Sarah Martin, associate director of forecasting at Dodge. “The continued elevation in the [index] should provide hope that construction activity will grow in 2024.

“Owners and developers tend to put projects into planning until well after economic conditions weaken,” she adds. “During the Great Recession, for example, the [index] did not substantially decline until 2009. Therefore, the anticipated mild economic growth in 2023 could cause the [index] to moderate over the year, but it is unlikely to fall below historical norms.”

According to Dodge, commercial planning in February was bolstered by almost 20 percent growth in office planning activity because data centers continued to steadily enter the planning queue. Institutional planning was driven higher by growth in education and health care projects, including the continued investment in research laboratories.

On a year-over-year basis, the Dodge Momentum Index remains 43 percent higher than in February 2022. The commercial component was up 55 percent, and the institutional component was 22 percent higher.

Specific projects

Twenty-two projects with a value of $100 million or more entered planning in February, according to Dodge.

The leading commercial projects were the $500 million Northwestern Mutual headquarters in Milwaukee and the $375 million Legacy Highlands warehouse and retail project in Beaumont, California. The leading institutional projects include the $500 million University of Michigan Residence & Dining Hall in Ann Arbor, Michigan, and the $213 million Center of Innovation laboratory building in Emeryville, California.