The Dodge Momentum Index rose 6.3% in February, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. 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.
February’s strong gain brought the index to 102.9 (2000=100), 23.4% higher than a year earlier. The increase was the third consecutive monthly gain and the first time the index has surpassed the 100 mark since 2010. In fact, the index is now at its highest level since April of 2010, suggesting that the recovery for nonresidential building may be finally gaining some traction.
February’s increase for the Momentum Index was due to an 11.9% surge in commercial projects; the institutional portion of the index remained mostly unchanged. The improvement in the commercial segment was driven primarily by robust gains for new office and store projects.
Some of the larger commercial projects entering the planning phase in February included a $150 million General Motors Data Center in Milford MI, the $110 million Gateway Plaza office building in Richmond VA and the $90 million Tower Two Office Building at North Hills in Raleigh NC. The largest project by far to boost the commercial component of the index was a $400 million tenant improvement project to finish the American Dream Mall in New Jersey. The sprawling complex near the Meadowlands has sat dormant since 2009, but Governor Chris Christie is pushing its new owners to quickly resume construction.