Dive Brief:
- August's Dodge Momentum Index increased 1.3% to a score of 134, edging up from its revised July score of 133.2, according to Dodge Data & Analytics.
- Dodge chalks up the modest rise in the Index to increases in both institutional (1.7%) and commercial (1%) planning in August.
- August marks five straight months of upward movement for the Index, marking the longest positive stretch since late 2012 into 2013.
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.
Year over year, the Index is up 16% from August 2015, driven by a rise in both institutional (22%) and commercial (11%). According to Dodge, this growth is an indication that developers have not paid heed to the uncertainty around the upcoming presidential elections and have not been deterred by a lethargic economy.
Dodge reported that 14 projects valued at more than $100 million entered the planning stages last month. These included a $400 million renovation to the Resorts World Hotel & Casino and a $312 million new Place Station Hotel, both in Las Vegas; a $260 million educational facility in Thompson, NY; and a renovation to the Lakeland Medical Center in Saint Joseph, MI, valued at $160 million.
The Dodge Index continues to outperform Commerce Department spending reports, the latest of which remained virtually unchanged from June and May. The department reported a July decline in public (-3.1%) construction with meager gains in private residential (0.3%) and private nonresidential (1.7%). This latest Dodge Index was also more optimistic than the latest American Institute of Architects' Architectural Billings Index report, which forecast that developers would most likely put large projects on hold until after the November elections.
