Report: Good momentum for nonresidential sector

The Dodge Momentum Index, Dodge Data & Analytics’ monthly measure of the first report for nonresidential building projects in planning, rose 3.7 percent in September to 130.8.

According to Dodge Data, its monthly measure has shown to lead construction spending for nonresidential buildings by a full year.

Both components of the index rose in September. The commercial component rose 3.9 percent while the institutional component moved 3.2 percent higher.

The index has made steady, albeit slow, progress since hitting a nadir in June, Dodge Data says. In the third quarter, the index gained 2.2 percent over the previous three months.

The commercial side of the index gained 7.4 percent in the third quarter, led by a large number of warehouse projects entering planning as e-commerce retailers such as Amazon continue to push projects forward.

Somewhat surprising to Dodge Data is that office projects entering planning also posted a tepid gain despite concerns that office work is shifting to remote settings.

The institutional component, however, lost ground in the third quarter; dropping 6.8 percent. Education projects have borne the brunt of this drop, Dodge Data says, as state and local government revenues declined. The decline creating the need for budget cuts across the country.

In September, seven projects each with a value of $100 million or more entered planning. The leading commercial projects were a $120 million office project in San Jose, California, and a $110 million Georgia-Pacific distribution facility in De Pere, Illinois. The leading institutional projects were the $275 million EV Smith Research Center at Auburn University in Auburn, Alabama, and a $250 million arena in Palm Desert, California.