Dodge Momentum Index up 2.4% with boost from institutional projects
The Dodge Momentum Index continued its upward trajectory in January to rise 2.4% to 126.4, up from its revised December score of 123.4. This is the second-consecutive positive month for the Index, driven by a 3.3% increase in institutional projects and a 1.6% increase in commercial projects.
Year-over-year, the Index is up 1.7%, despite commercial’s dip of 6.8%. Dodge Data noted that commercial planning had a vigorous start at the beginning of 2015 but calmed by the middle of the year. In recent months, commercial has been up and down, but improving commercial real estate fundamentals have revealed an overall positive trend.
The year-over-year institutional story is more robust than that of commercial, as it started the year in a weak condition but has since shot 14% higher than that of a year ago via small improvements throughout the year.
The Momentum Index is a monthly measure of initial reports of nonresidential building projects in planning, which usually lead nonresidential construction spending by one year.
In January, as in December, 10 projects or more of $100 million in value entered their first phases, according to Dodge Data.
Among the large commercial projects entering planning in January were a $270 million convention center hotel in San Diego, CA, and a $140 million office and retail building in Atlanta, GA. Entering the planning stage in the institutional sector were a $160 million renovation and addition at a USDA lab in Athens, GA, and a $150 million hospital expansion in Corpus Christi, TX.
The Momentum Index coincides with CMD's recently released first-quarter forecast report, which predicted construction starts this year "will pick up the pace," largely due to improving job and income conditions, as well as stronger demand in the residential sector, and a surge in nonresidential building.