In its second month of decline, the Dodge Momentum Index dropped 1.3% from July to August to 137.8 (2000=100) from the revised July reading of 139.6. The Momentum Index, issued by Dodge Data & Analytics, 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 drop was the result of a 16.6% decline in the institutional component offsetting a 9.1% gain in the commercial component.
On a year-over-year basis, the overall Momentum Index is 10.3% below August 2018, suggesting that construction spending will be settling back as the year progresses. However, most of the decline occurred in 2018 – the Momentum Index has lost only 1.8% since the beginning of 2019, indicating that while construction activity will ease, it is not in a freefall. On a year-over-year basis, the institutional component is 22.5% lower, while the commercial component is down 2.4%.
In August, there were 11 projects each with a value of $100 million or more that entered planning. The leading commercial projects were a $215 million office building in Mount Juliet, TN, and a $200 million Amazon fulfillment center in Memphis, TN. The leading institutional projects were a $235 million hospital tower in Salem, OR, and a $150 million dormitory at the University of South Carolina in Columbia, SC.