A leading indicator of construction spending rose during the previous month, yet planning for major projects has seen a slide from the previous year. According to Dodge Data & Analytics, the Dodge Momentum Index climbed 4.0% in June to 146.1 (2000=100) from a revised May reading of 140.5. 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 June increase for the Momentum Index reflected a 6.1% jump by its institutional component and a 2.4% gain by its commercial component. But while both saw increases for the month, planning for commercial and institutional building projects has taken a step back from the vibrant pace seen in the first half of 2018.
The average of the overall Momentum Index through the first six months of 2019 was 4.3% below the same period a year ago, with the commercial component down 5.2% and the institutional component down 3.0%. June’s improvement does, however, show that the broader pullback remains gradual, and that there are still ample projects at the planning stage to maintain stability for construction spending in the near term.
June saw 17 projects each with a value of $100 million or more that entered planning. The leading institutional projects included a $375 million detention facility in Mount Clemmons, MI, and the $360 million Dignity Health Dominican Hospital in Santa Cruz, CA. The leading commercial projects were the $250 million Seaport Square office building in Boston, MA, and a $200 million warehouse in Suffolk, VA.