Economy Watch: Construction Industry Loses Momentum in April

Despite April's decline, the Dodge Momentum Index remains largely up, according to Dodge Data & Analytics. This suggests that construction activity still has room to grow in 2017.
Source: Dodge Data & Analytics
Source: Dodge Data & Analytics, April 2017

The Dodge Momentum Index dropped in April to 133.8 (2000 = 100) from its March reading of 140.9, according to the latest report by Dodge, which specializes in construction industry data. April’s decline was due to a 12 percent drop for the institutional component of the index, while the commercial component rose a meager 0.1 percent.

The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending on such buildings by a year. Since early 2016, the index has gained substantial ground, though in a sawtooth pattern, increasing by over 20 percent through March this year, the company said.

Despite April’s decline, the Momentum Index remains broadly up, according to Dodge, suggesting that construction activity still has further room to grow in 2017. That’s in contrast to 2014 and ’15, when the index enjoyed little improvement, gaining just 4 percent in that 24-month span.

In April, six projects entered the planning stage with a value of more than $100 million each. In the commercial building sector, the leading projects were a $275 million commercial building project in Brooklyn and the $110 million Optimus Logistics Center in Perris, Calif. The leading institutional projects were the $200 million Kennedy Health Patient Tower in Turnersville, NJ, and the $110 million Highline High School replacement in Burien, Wash.