Dodge Momentum Index rises 1.6% in February on institutional strength

Dive Brief:

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.
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.
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.