The Dodge Momentum Index advanced 8.4 percent in April to 123.0 (2000=100), 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 had retreated in February and March, following the steady gains that were reported during most of 2013. With the April increase, the Momentum Index resumed its upward track, and is up 17.8 percent compared to the same month a year ago. A harsh winter helped slow overall economic growth in the first months of 2014, but prospects for commercial development are again showing improvement, as reflected by the growing volume of projects at the planning stage and strengthening market fundamentals such as occupancy rates and rents.
The April Momentum Index was bolstered by an upturn for both of its segments. Commercial was the stronger of the two components, climbing 12.1 percent from March. Among the larger commercial projects to enter planning in April were several office buildings and hotels – a $300 million headquarters for Toyota in Plano, Texas, a $260 million convention center hotel in Seattle, and a $200 million Waldorf Astoria hotel in Los Angeles.
The institutional segment of the Momentum Index, meanwhile, rose 3.9 percent in April, marking its first monthly increase since January. A small increase in plans for educational buildings moderated the overall increase for institutional buildings and offset a stronger gain for healthcare projects.