The Dodge Momentum Index rose 0.8 percent in April to 122.6 (2000=100) from March’s 121.6, according to Dodge Data & Analytics. 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.
April’s slight rise shows planning activity beginning to edge up once again after retreating 2.5 percent in March, continuing the up-and-down pattern that’s been present so far in 2015. Although the planning statistics have essentially plateaued in early 2015, the level of activity continues to be higher than a year ago, enabling the latest month’s Momentum Index to be up 8.5 percent compared to April 2014.
With the commercial sector still helped by improving occupancies and rents, while the institutional sector is benefitting from the passage of recent bond measures, it’s expected that the Momentum Index will see a more sustained upward trend as 2015 progresses.
Planning activity for both the commercial and institutional sectors posted modest gains in April, with commercial up 0.5 percent and institutional up 1.2 percent. The slight increase for the commercial sector was supported by three sizeable projects that entered planning – a $500 million expansion of the JW Marriott & Ritz Carlton Hotel in Los Angeles, a $300 million Loews Sapphire Falls Resort in Orlando, and a $100 million warehouse and office building project in Santa Fe Springs, Calif.
For the institutional sector, there were also three projects valued at $100 million or more that entered planning – a $150 million high school renovation in Beverly Hills, Calif., the $100 million AltaSea Marine Research and Interpretive Center in Los Angeles, and the $100 million Seattle Children’s Research Institute in Seattle.