The Dodge Momentum Index increased 10 percent in October to 181.2 (2000=100), from the revised September reading of 164.6. The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. In October, commercial planning rose 14 percent and institutional gained 3 percent.
Nonresidential
The value of nonresidential building projects entering planning has staged a solid recovery this fall. It has lifted the Momentum Index to its highest level in nearly 14 years, following a near-moribund summer of activity. The commercial sector has shown strength, having reached its highest level since the inception of the Index. The October gain in the Momentum Index was driven by increased planning in warehouses, offices, and health care structures. Compared to a year earlier, the Momentum Index was 47 percent higher in October 2021. The commercial planning component was 59 percent higher, and institutional was 26 percent higher.
A total of 20 projects with a value of $100 million or more entered planning in October. The leading commercial projects were a $450-million Walmart Distribution Center in Lyman, South Carolina, and a $400-million Facebook data center in Los Lunas, New Mexico. The leading institutional projects were the second and third phases of the California Northstate University Medical Center in Sacramento, valued at $500 million for each phase.
The dollar value of projects in the planning stage is impressive and portends a healthy rise in nonresidential building construction starts on tap for 2022. However, that expectation must be balanced against rising material costs, shortages of key goods and a lack of skilled labor that will work to keep growth rates modest next year.
