Dodge Momentum Index Slips in August

August’s decline in the headline index, according to the report, was led by an increase in hotel projects, while fewer healthcare projects drove the institutional component lower.

Compared to August 2021, the overall Momentum Index was 14% higher last month. The institutional component was up 10%, while the commercial component was 16% higher on a year-over-year basis.

The report noted that a total of 26 projects with a value of $100 million or more entered planning in August. The leading commercial projects were the $400 million Two Tower office building in Chicago, Ill., the $300 million phase 2 of the Sungate Logistics Park in Daytona Beach, Fla., and the $275 million Aligned Data Center in Sterling, Va. The leading institutional projects were the $360 million Scripps Mercy Hospital expansion and the $275 million Triton Center redevelopment, both located in San Deigo, Calif. Additionally, $275 million in improvements for Okemos Public Schools in Meridian Charter Township, Mich., went into planning since a bond measure for this project will appear on the local ballot in November.

“In spite of weak institutional planning activity, the Momentum Index remained elevated in August, just a notch below July’s 14-year high,” said Sarah Martin, Dodge’s senior economist. “This indicates continued confidence from owners and developers that nonresidential building projects will be realized in the coming year.”

Weaker economic conditions and rising interest rates though could grind down overall consumer and business confidence as we move into 2023. The dynamic would translate into fewer nonresidential building projects breaking ground, added Martin.

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By David Schollaert, David@SteelMarketUpdate.com