Dive Brief:
- The Dodge Momentum Index, a benchmark that measures nonresidential building planning, increased 9.6% in October driven by an uptick in office and hotel and projects, according to Dodge Data & Analytics.
- The October reading follows a 5.7% increase in September and is up 28% for the year, the latest sign the construction industry continues to rebuff any recession fears, said Sarah Martin, Dodge senior economist. The index typically leads actual construction spending by 12 months.
- “The sustained upward trajectory in the Momentum Index shows optimism from owners and developers that projects will continue to move forward, even with rising concerns of an economic recession,” said Martin.
Dive Insight:
Demand for data center construction bolstered the commercial component of the momentum index over the past several months, according to Dodge. This time around, the commercial component increased 13% in October largely due to a jump in office and hotel projects.
“Specific nonresidential segments, such as data centers and life science laboratories, have thrived in 2022 and continue to support strength in planning activity,” said Martin. “As we move into next year, however, labor and supply shortages, high material costs and high interest rates will likely temper planning activity back to a moderate pace.”
The institutional component showed varied results, according to the report. Recreational and education projects posted growth, but that momentum was countered by a decline in the number of healthcare and public planning projects. Overall, institutional projects in planning rose 2.9% for the month, according to the report.
The commercial and institutional components increased 29% and 25% from one year ago, respectively.
A total of 15 projects with a value of $100 million or more entered planning in October, according to the release.
The leading commercial projects included a $206 million expansion to the M Resort in Henderson, Nevada, and the second phase of the $180 million 1416 Dodge Office Towers in Omaha, Nebraska.
The leading institutional projects were the $500 million uCity Square Lab and Office Complex in Philadelphia and the $294 million life science research and development laboratory complex in San Carlos, California.
