The Dodge Momentum Index moved 5.3 percent higher in November to 159.7 (2000=100) from the revised October reading of 151.7. 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.
November’s gain was due to a 9.4 percent rebound for the commercial component of the Momentum Index. The recent setbacks in the overall Momentum Index were the result of declines in planning for commercial buildings, and while such planning did rebound in November, the level remains below what was reported in late spring and early summer. This is consistent with the view that the commercial building sector may now be nearing a peak.
Meanwhile, the institutional component of the Momentum Index eased back 0.6 percent in November. Plans for institutional building projects have remained generally stable during 2018, reflecting the influence of public funding as it relates to such projects as schools and transportation terminals.
In November, 13 projects each with a value of $100 million or more entered planning. The two leading commercial projects were a $350 million hotel in Indianapolis and a $300 million office building in Chicago. The two leading institutional projects were a $320 million high school in Chino, Calif., and a $240 million research laboratory in Long Island City, N.Y.