Dodge Momentum Index falls 5% after 6 straight months of gains

Dive Brief:

The Dodge Momentum Index ended a six-month streak of gains in April, falling 5.1% to 133.8 from a downward-revised revised March reading of 140.9, according to Dodge Data & Analytics.
The institutional sector, the driver of previous gains in the index, dropped 12%, while the commercial segment remained almost flat at 0.1%.
Even with this reported setback in momentum, since early 2016, the index has gained more than 20% through the end of March 2017 — far surpassing the same period in 2014–2015, which saw only a 4% increase. Dodge economists said this trend indicates that construction through the rest of 2017 should continue its expansion.

Dive Insight:

The number of commercial and institutional projects entering the planning stages and valued at more than $100 million dropped to six in April. These included a $275 million commercial building in Brooklyn, NY; the Optimus Logistics Center in Perris, CA; the $200 Kennedy Health Patient Tower in Turnersville, NJ; and the $110 million Highline High School replacement in Burien, WA.

Dodge reported last month that March nonresidential construction starts rose by 5% from February to a seasonally adjusted annual rate of $743.7 billion, representing the third-consecutive month of increases. The nonbuilding category of public works and its growth rate of 16% was the main driver, as it was the previous month. Residential also rose 4% in March thanks to an uptick in multifamily, and office construction starts rose 41%.

ConstructConnect also reported strong starts activity across the board for March, with institutional up 28.6%, commercial up 12.4% and heavy engineering/civil with gains of 11%. However, total year-over-year starts were down 5.9%, as were year-to-date starts (-5.1%).

Another indicator of future construction activity, the Architecture Billings Index from the American Institute of Architects, saw continued growth in March, reaching a score of 54.3. The AIA will release the April reading later this month, which will indicate whether the group reinforces the April dip in the Dodge index.