The Dodge Momentum Index dropped 1.3% from July to August to 137.8 (2000=100) from the revised August 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 in September 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 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 free fall. 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 institutional project included a $235-million hospital tower in Salem, Oregon.