Dodge Momentum drops on moderating data center growth

“A surge in data center activity drove much of the recent rapid growth in the DMI – so as planning for that sector moderated over the month, overall commercial planning fell back,” explained Sarah Martin, DCN’s associate director of forecasting.

On the commercial side, planning for warehouses, offices, and stores slowed. Hotel planning, meanwhile, has been accelerating over the past five months and expanded further in September. And while data centers continued to account for the bulk of large projects, their growth rate slowed, according to DCN.

Education, healthcare, and recreational projects drove the September expansion in institutional planning, while religious planning declined.

Despite the index’s monthly decline, Martin pointed out that it “remains at very robust levels.”

Compared to a year ago, September’s DMI was 21% higher, with the institutional segment rising 4% and the commercial segment surging 31%.

“By mid-2025, the Fed’s rate cuts should spur planning projects to reach groundbreaking more quickly – leading to stronger nonresidential activity as 2025 progresses,” Martin added.

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