Dodge Momentum Index Increases in March, Boosted by Commercial Sector Strength

The Dodge Momentum Index moved 4 percent higher in March to 166.9, up from the revised February reading of 160.3. 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 March, the commercial component of the Momentum Index rose 7 percent, while the institutional component fell by less than 1 percent.

The Dodge Momentum Index continued to trend higher in March, largely due to gains in planning for commercial projects. Commercial planning in March was just slightly lower than the all-time high set in October 2021. However, commercial planning has been much more volatile than institutional planning due to the presence, or absence, of large projects month-to-month. The institutional component has also been trending upward but remains 25 percent below the record set in December 2007. When compared to March 2021, the overall Momentum Index was 17 percent higher in March 2022. The institutional component was up 23 percent over the year, while the commercial component was 14 percent higher.

Nonresidential projects entering planning continue to be robust despite rising energy prices, higher material costs, and significant shortages of labor. While projects should continue to enter the pipeline, the lag from planning to groundbreaking has been growing and will likely result in a delayed impact on construction starts.