Dodge Momentum Index Drops Again in May

Slowing activity in office and hotel planning negatively impacted commercial planning, which fell by 6.1%. Conversely, institutional planning grew by 5.6% thanks to sustained growth in education, health, and amusement projects. Compared to last year, commercial components were up 7% while institutional components were up 18%.

“Institutional planning steadily improved over the month as research and development laboratories and hospital projects steadily entered planning,” commented DCN’s associate director of forecasting Sarah Martin.

“Sustained elevation in the federal funds rate and tighter lending standards will likely constrain growth in the DMI over the second half of 2023; however the index remains above the historical average. This paints an optimistic landscape for non-residential construction in mid-2024, as the economy recovers and the Fed begins to pull back rates,” she added.

Thirty projects valued at over $100 million were entered into planning in May, DCN said.

Dodge is the leading index for commercial real estate, using the data of planned nonresidential building projects to track spending in the important steel consuming sector for the next 12 months. An interactive history of the DMI is available on our website.

By Becca Moczygemba, becca@steelmarketupdate.com