The Dodge Momentum Index grew 4.1% in October to 133.6 from its revised September reading of 128.3 (2000=100). 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. October’s gain nearly reversed the loss in September, and returns the Momentum Index to the rising trend that began earlier in the year.
According to Wells Fargo Securities, the Dodge Momentum Index is up 15.3% year over year. Wells Fargo also points out that October's double-digit year-ago pace is consistent with the trend registered earlier this year.
The commercial component of the Momentum Index rose 6.1% in October, and is 20% above last year. This suggests that despite being in a more mature phase of the building cycle, commercial construction has room for further growth in the coming months. The institutional component of the Momentum Index increased 1.4% in the month, and is now 10% higher than one year ago.
Both the commercial and industrial sectors are posting strong year-ago gains of 19.7% and 9.6% respectively, according to Wells Fargo Securities.
In October, 12 projects entered planning each with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $270 million office building in Jersey City NJ and a $250 million office tower in Somerville MA. The leading institutional projects were a $250 million hospital in New York NY and a $140 million high school in Upper Arlington, OH.
