Steel Markets
Dodge Momentum Index Sees First Decline This Year
Written by Michael Cowden
July 9, 2021
The Dodge Momentum Index has fallen for the first time this year – and after six consecutive months of gains – on uneven demand and higher costs.
The index now stands at 165.8, down 5% from a revised May number of 175.1, according to Hamilton, N.J.-based Dodge Data & Analytics.
“Uncertain demand for some building types (such as retail and hotels), higher material prices, and continued labor shortages are weighing down new project planning,” the group said in a statement.
Case in point when it comes to higher costs: SMU’s benchmark hot-rolled coil price is at $1,770 per ton ($88.50 per cwt), an all-time high by a wide margin. That figure is up 80% from $985 per ton at the beginning of 2021 and more than triple $475 per ton in July of 2020, according to SMU’s interactive steel pricing tool.
“June’s retreat in planning activity is another sign that the recovery from the pandemic-led recession will be nonlinear,” Dodge said.
Despite the June dip, the Momentum Index remains near a 13-year high. It is up 41% versus June 2020 with planning for commercial construction up 39% year-over-year and that for institutional construction up 46%.
“The current level of the Momentum Index and its underlying components … continue to signal that a more broad-based recovery in nonresidential construction starts will occur in 2022,” Dodge said.
Thirteen new projects valued at $100 million or more entered planning in June, the group said.
The Dodge Momentum Index is a key advance indicator of nonresidential construction demand. The group says its planning data lead construction spending by as much as a year.
An interactive history of the Dodge Momentum Index is available here on our website. If you need assistance logging into or navigating the website, please contact us at info@SteelMarketUpdate.com.
Michael Cowden
Read more from Michael CowdenLatest in Steel Markets
Hot-rolled coil buyers continue seeking certainty
Steel market participants contend that buyers will remain in “wait-and-see" mode until some market stability is restored.
Latin American steel advocates warn on cheap import flood
Subsidized Chinese steel imports and cheap steel products from Association of Southeast Asian Nations (ASEAN) entering Latin American (LATAM) are threatening the region's steel market.
CRU: Steel prices fall amid global demand weakness
The forceful headwinds bearing down on steel markets across the globe have created demand challenges and sent prices southward. The US, however, challenged the global trend.
Hot-rolled price hikes garner mixed reactions from the market
Several steel market sources say they were blindsided when mills increased spot prices for hot-rolled coils this week.
Steel market participants mull the impact of US/Mexico S232 negotiations
Steel market participants learned that negotiations between the US and Mexico include discussions about Section 232 tariffs on steel and aluminum despite President Trump’s June 3 proclamation increasing the tariffs from 25% to 50% for all steel and aluminum imports—except for those from the UK.