Nonresidential building hits 14-year high
By Jenny LescohierJuly 13, 2022
Nonresidential building reached a 14-year high in June, according to the Dodge Momentum Index.
The Dodge Momentum Index (DMI) increased less than one percentage point in June to 173.6 (2000=100) from the revised May reading of 173.1, pushing the measure to a 14-year high.
The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning. The index is shown to lead construction spending for nonresidential buildings by a full year.
In June, the commercial component of the Momentum Index rose 4.1%, while the institutional component fell 6.2%.
“A new cyclical high in the Momentum Index is a sign that developers feel that projects still have hope of moving forward, despite concerns of an impending economic slowdown. However, this sentiment will be tested in the months to come as higher interest rates eat away at business and consumer confidence,” said Richard Branch, chief economist for Dodge Construction Network.
Commercial planning in June was led by an increase in warehouse projects, while most other commercial buildings were flat. For institutional planning, a decrease in education projects in June dragged the sector lower, although healthcare increased. On a year-over-year basis, the Momentum Index was 9% higher than in June 2021. The commercial component was 11% higher, and the institutional component was 5% higher than one year ago.
A total of 27 projects with a value of $100 million or more entered planning in June. The leading commercial projects were the $400-million Somerset Nevele Resort in
Ellenville, NY, and the $300-million first phase of the Ten85 warehouse building in Buckeye, AZ.
The leading institutional projects were the $390-million 10 Twin Dolphin life science campus in Redwood City, CA, and the $280-million expansion of the Connecticut Childrens Patient Tower in Hartford, CT.