The Dodge Momentum Index rose 3.6 percent in May from the previous month, according to McGraw Hill Construction, a division of McGraw Hill Financial. 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 Momentum Index has risen for six consecutive months, the longest period of increases since 2006.
The index now rests at 117.4 and is up 36 percent since May of 2012. The uncertainty surrounding new development appears, for now, to have dissipated, and the climate for nonresidential building projects is gaining strength, as the planning pipeline grows more active.
In contrast to prior months, the May advance for the Momentum Index was largely the result of a strong upturn by its institutional segment. New plans for institutional buildings rose 10.2 percent in May, bolstered by plans for several college and hospital-related projects. Among the larger healthcare developments to enter planning in May were the $135 million University Hospital Patient Tower in West Chester, Ohio, and the $120 million INOVA Comprehensive Cancer and Research Institute in Fairfax, Va.
The largest institutional project overall to enter the planning phase in May was a $450 million/300,000-sq.-ft. casino project in Milford, Mass. Advancement for this project is still dependent on voter approval, however. Meanwhile, the commercial segment took a pause in May, receding 1.6 percent from April. A dip in office-related planning projects weighed on the commercial component of the index, while retail development continued to gain strength.