Dodge Momentum Index Increases in January, though Institutional Planning Drops

The Dodge Momentum Index increased 3.1 percent in January to 139.4 (2000=100) from the revised December reading of 135.2. 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 commercial component of the Momentum Index moved 9.9 percent higher, offsetting an 11.7 percent decrease in the institutional component.

January’s increase marked the highest level in the Momentum Index since the COVID-19 pandemic began. While certainly positive news, the Momentum Index is also sending a warning that the construction sector’s recovery may be very uneven in the months ahead. Institutional planning hit its lowest level since the Momentum Index began in 2002 as state and local governments pull back on building plans in the wake of growing budget deficits. Conversely, commercial planning is at its highest level since before the Great Recession, fueled by an increasing number of warehouse projects and to a somewhat lesser degree office projects. On a year-over-year basis the overall Momentum Index is 2.2 percent below January 2020. The commercial component is up 12.3 percent year-over-year, while the institutional component is down 27.7 percent.

In January, 13 projects each with a value of $100 million or more entered planning. The leading commercial projects were a $420-million Walmart distribution center in Lancaster, Texas, and a $355-million Amazon warehouse, Project Roxy, in Arlington, Washington. The leading institutional projects were the $175-million Norman Regional Healthplex expansion in Norman, Oklahoma, and the $156-million Mercy Health Hospital in Kings Mills, Ohio.