The Dodge Momentum Index rose in October, climbing 13.2 percent to 130.9 (2000=100) from the revised September reading of 115.6. 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.
The move higher in October nearly reversed the erosion of the past four months (including September’s 7.9 percent decline), with October posting healthy gains in both sectors. From September to October the commercial portion of the Momentum Index advanced 16.8 percent, while the institutional portion grew 8.3 percent.
On a year-over-year basis, the Momentum Index is now 6.1 percent higher, with the commercial portion up 5.5 percent and the institutional portion up 6.9 percent. October’s increase supports the belief that building activity has further room to grow during this cycle. While month-to-month activity could continue to be volatile, there are enough projects in the pipeline to sustain growth into 2018.
In October, 20 projects each with a value of $100 million or more entered planning. For the commercial building sector, the leading projects were a pair of Facebook data centers in Sandston, Va., valued at $400 million and $200 million, respectively. The leading institutional projects were a $480 million hospital in Dallas and a $160 million hospital tower in Seattle.