Dive Brief:
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The Dodge Momentum Index increased 1.6% in February to a mark of 144 from a downward-revised January reading of 141.7, according to Dodge Data & Analytics, marking the fifth-consecutive month of growth for the index.
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The index tracks nonresidential construction projects in the planning stages as an indicator of future construction spending. As it did in January, Dodge attributed February's month-over-month gains to activity in the institutional sector, which was up 4.4% from January. Commercial posted another negative month, contracting 0.3% for the period.
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February's reading was 22% higher than the year-ago period, with commercial planning up 28% and institutional ahead by 15%, indicating the potential for continued spending gains in 2017.
Dive Insight:
Just four commercial and institutional projects valued at more than $100 million entered the planning stages last month, down from 11 in January, Dodge reported. These were a $100 million hospital in Westampton, NJ; a $100 million military barracks in Great Lakes, IL.; a $130 million hotel and shopping center in La Puente, CA; and a $470 million hotel in Nashville, TN.
Such large projects, which have been unpredictable, continue to influence the Index. Dodge has registered high momentum for almost half a year running. Starts were up 12% from December to a seasonally adjusted rate of $690.2 billion in January, according to the company. Major airport terminal projects, such as the $3.4 billion construction of Terminal B at LaGuardia Airport in New York City, drove that surge, as did a $750 million natural gas–fired power plant and two pipelines.
In a separate forecast, ConstructConnect reported that nonresidential starts were down 9.1% to $24.6 billion in January from an upward-revised December figure of $27.06 billion. The company attributed the decline to the winter weather and said it was in line with past years.
The commercial and heavy engineering categories fared the worst, declining 14.4% and 12.3%, respectively. As in Dodge's report, the institutional category was the star in January, with ConstructConnect reporting a 6.3% rise.
