Dive Brief:
-
The Dodge Momentum Index took a hit in September, falling 4.3% to a score of 129 from its upward-revised August reading of 134, according to Dodge Data & Analytics.
-
Dodge blames the loss on the same two sectors behind the Index's upward march last month: commercial and institutional planning, which were down 3.6% and 5.3% respectively.
-
This retreat comes after five consecutive months of increases, reintroducing the volatility that has plagued the Index since 2014.
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.
Despite losing ground last month due to a dearth of large projects, year over year, the Index is up 5.1% since September 2015. And developers seem to be making progress with their projects, even in an unsure economic and political environment, according to Dodge. Even institutional (5.4%) and commercial (4.9%) have shown year-over-year gains despite this month's poor performance.
Dodge reported that only five projects valued at more than $100 million — nine fewer than in August — entered the planning stages last month. These included a $200 million office high-rise in Chicago, a $150 million JW Marriott Hotel in Irvine, CA, a $150 million hospital in Evanston, WY, and a $105 million hospital in Salt Lake City.
Unlike Dodge's humble August increase, ConstructConnect reported a 2% decrease in nonresidential starts in August from July's starts value of $34.5 billion. ConstructConnect found significant increases in commercial (28.8%) and industrial (9.9%) planning, which were overshadowed by the downturn in the institutional (-17.5%) and heavy engineering (-8.8%) categories. While the difference in month-to-month figures from various reporting agencies can be given some wobble room, the year-over-year difference is notable. Dodge reported that both the commercial and institutional sectors saw mid-single-digit increases last month, while ConstructConnect reported those categories up 22.5% and 17.5% respectively.
