Dive Brief:
- The October Dodge Momentum Index rose 4.1% to 133.6 — up from a downward-revised reading of 128.3 in September — almost reversing the previous month's contraction, according to Dodge Data & Analytics.
- Commercial planning increased 6.1% since September and grew year over year at a rate of 20%. Institutional planning rose at a smaller month-to-month pace of 1.4% but came in 10% higher than in October 2015.
- Dodge said October's positive movement in the Index means that it is once again on the upswing and that the commercial should continue to grow over the next several months.
Dive Insight:
The Momentum Index is a monthly measure of initial reports of nonresidential construction projects in the planning stages, which typically lead nonresidential construction spending by one year.
Dodge reported that 12 institutional and commercial projects — up significantly from last month's five — valued at more than $100 million entered the planning stages in October. These included a $270 million office building in Jersey City, NJ; a $250 million office tower in Somerville, MA; a $250 million hospital in New York and a $140 million high school in Upper Arlington, OH.
While the American Institute of Architects hasn't yet released its October Architectural Billings Index numbers, its September report took a far less positive tone than Dodge regarding future construction activity. The ABI fell to 48.4 from an August reading of 49.7, representing the first time in more than four years the Index remained below 50 for two consecutive months. The ABI is considered an indicator of future construction spending nine to 12 months in advance, and any reading below 50 indicates reduced demand for design services, which could lead to less construction activity down the road.
AIA Chief Economist Kermit Baker called the two-month decline "a warning sign" but also hinted that the industry could bounce back once apprehensions around the presidential election have waned.
