Dive Brief:
- The Dodge Momentum Index bounced back in October — from four consecutive months of losses — and rose 13.2% to a reading of 130.9 from a revised September mark of 115.6, according to Dodge Data & Analytics.
- The index is divided into institutional and commercial components, both of which posted robust month-over-month October gains of 8.3% and 16.8%, respectively. Twenty $100 million-plus projects entered the planning stage in October, which is twice the number reported in September. They include two Facebook data centers in Virginia with a combined value of $600 million, a $480 million Dallas hospital and a $160 million hospital tower in Seattle.
- While month-to-month construction planning could continue to be unpredictable, Dodge said, projects getting ready to come online should support growth into 2018.
Dive Insight:
The Momentum Index takes a look at nonresidential projects that have entered the planning phase, and that data is then used to forecast construction activity for the 12-month period ahead.
The American Institute of Architects' (AIA) Architecture Billings Index (ABI) is considered to be an indicator of future construction spending, but the latest ABI, which reported September billing activity, indicated the opposite of the rally that Dodge saw last month. After a seven-month string of increases, the September ABI came in at 49.1. Any reading below the 50 mark indicates a downturn in billings.
The news was better for another Dodge measure, the monthly valuation of construction starts. For September, Dodge reported a 14% uptick in the value of starts from August to a seasonally adjusted rate of $814.8 billion. Big projects like a $6 million Shell ethane cracker plant in Pennsylvania and the new $4 billion Delta terminal at LaGuardia Airport in New York City were major contributors to that upswing.
Like the Facebook projects Dodge highlighted in its Momentum Index report, data center construction, in particular, is booming in several areas of the country. The biggest hotspot is Northern Virginia, according to Data Center Frontier. Drawn to the region's proximity to the highest-density dark fiber system in the world, a ready supply of co-location and cloud service providers, a location near the Northeast, little chance of natural disasters, reasonable power costs and a business-friendly environment, companies like Vantage Data Centers are setting up shop there. Last month, according to Bisnow, Vantage announced plans to build a 42-acre, $1 billion data center complex in Ashburn, VA, also known as "data center alley."
The Dallas area takes second place when it comes to U.S. data center square footage. CyrusOne, a national data center company, began construction in late October on a 1-million-square foot, 100-megawatt complex in Allen, TX, just north of Dallas.
