Dive Brief:
- The Dodge Momentum Index was up once again in January, this time by 3.9% to 142.6 from a revised December mark of 137.3, according to Dodge Data & Analytics.
- Dodge credits the December to January gain to a 12.1% rebound in the institutional sector, which made up for a 1.0% decrease in commercial planning.
- Though commercial gave up some ground last month, Dodge reported that the sector has still maintained a near eight-year high and predicted that it will likely see an uptick in 2017.
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.
The institutional sector's overall progress in late 2016, the organization noted, combined with January's results — despite being subject to the whims of healthcare, recreation and big terminal projects — indicates that it, too, could achieve additional growth this year.
Dodge reported that 11 commercial and institutional projects valued at more than $100 million — an increase of three from December — entered the planning stages last month. These included a $278 million mixed-use building in New York City; a $180 million hotel and casino in Porterville, Calif.; a $192 million Department of Veterans Affairs medical facility in Reno, Nev.; and a $145 million medical high-rise in Hackensack, N.J.
Part of the commercial sector narrative for 2017 will be an increase in office construction, a trend that both Dodge and ConstructConnect include in their predictions for 2017. Alex Carrick, chief economist for ConstructConnect, said he anticipates a gain in private office construction starts this year of 11.3% ($20.5 billion), while Dodge forecasted that 2017 office starts would grow by 10%, or 110 million square feet.
As far as 2017 institutional growth, Dodge's prediction for a continued uptick in starts stems from amusement and recreation buildings, which are expected to increase this year by 13%. Educational starts should be another big driver of the sector this year, with a projected increase of 9%, or 138 million square feet. Recent bond measures should result in the release of some school construction cash in 2017, particularly for K-12 facilities.
