Dodge Momentum Index Jumps in December

NEW YORK, N.Y. – The Dodge Momentum Index increased 2.9 percent in December to 136.7 (2000=100) from its revised November reading of 132.8. The momentum index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. After trending upward over the course of 2016, the index is now at an eight-year high, although still more than 25 percent below its previous peak reached at the end of 2007. December’s gain was due to a 5.7 percent increase in the commercial component, which more than offset a 1.7 percent drop in the institutional component. After ending 2015 in a lull, commercial planning intentions posted remarkable strength in 2016, climbing 38 percent over the year. Meanwhile, institutional planning settled back in 2016, losing 6 percent after a strong 2015. This suggests that commercial construction activity has more room to grow in 2017 despite being at a more mature phase of its cycle, while planning in the institutional sector has yet to see the benefit of the numerous education-related bond measures passed in recent years.

In December, eight projects entered planning each with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $400-million mixed-use building in Atlanta, Georgia, that will include 640,000-square-feet of office space and a hotel, and a $351-million office tower in San Francisco, California. The leading institutional projects were a $140-million renovation to the Quicken Loans Arena in Cleveland, Ohio and a $130-million high school in Sherman, Texas.