Steel Markets

Dodge Momentum Index rebounds on surge of data center planning

May 7, 2024

A surge in planning for data center projects pushed the Dodge Momentum Index (DMI), a leading indicator for the nonresidential construction sector, higher in April.

The DMI registered 173.9 in April, a rise of 6.1% from March and 1% from April 2023, Dodge Construction Network (DCN) reported on Tuesday.

The DMI tracks the value of nonresidential construction projects entering the planning stages. It typically leads construction spending by about 12 months.

The index had been flat for much of the second half of last year. It then steadily began falling, hitting a two-year low in March, before bouncing back in April.

The Commercial Building component of the index surged 12.6% month on month (m/m) and 6% year on year to a 12-month high. The jump was primarily due to “a deluge of data center projects that entered the planning stage” in April, according to Sarah Martin, DCN’s associate director of forecasting.

“Outsized demand to build Cloud and AI infrastructure is supporting above-average activity in the sector,” she commented.

At the same time, DCN noted steady warehouse planning but slower momentum in traditional office and hotel projects.

Meanwhile, the index’s institutional building component fell 6.3% m/m and 15% y/y to 118.5 in April, as planning for education and healthcare pulled back again. The last time an institutional component this low was recorded was in August 2021.

DCN pointed to uncertain interest rates and lending standards as reasons for slower growth in other categories. “If interest rates begin to tick down in the latter half of 2024, more substantive growth in nonresidential planning activity should follow,” Martin noted.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.