The Dodge Momentum Index moved a scant 0.1 percent lower in May to 129.2 (2000=100) from the revised April reading of 129.4. 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 rose 1.0 percent during the month, while the institutional component dropped 1.9 percent.
The resilience of the Momentum Index over the last two months has been remarkable in the face of the COVID-19 crisis and resulting economic recession. With May’s reading, the Momentum Index is down 17 percent from its most recent peak in July 2018. During the Great Recession, by contrast, the peak-to-trough decline was 62 percent. While the Momentum Index may move lower in the future, its present level continues to suggest that there are enough projects entering planning to allow construction to begin a modest recovery in the third quarter, say Dodge analysts.
