Economy Watch: Nonresidential Construction Still Strong
- Sep 12, 2016
There’s still promise of growth ahead for U.S. nonresidential construction: The Dodge Momentum Index grew to 134.9 in August (2000 = 100) from its July reading of 133.2. The index, which is published by construction industry data specialist Dodge Data & Analytics, is a measure of the first (or initial) report for nonresidential building projects in planning, which anticipates construction spending for nonresidential buildings by a year.
A 1.7 percent month-over-month increase from July for institutional planning, along with a 1 percent gain for commercial planning, drove the overall gain in August. It’s the fifth month in a row that the Momentum Index has increased, which is the longest such streak since late 2012 and early 2013.
Compared with this time last year, the Momentum Index is also 16 percent higher, reflecting a rise in institutional planning of 22 percent, and commercial planning by 11 percent. That both sectors are showing such improvement suggests developers are shrugging off sluggish economic data and the uncertainty surrounding the November elections, and moving ahead with plans for new projects, Dodge posited.
In August, 14 projects entered the planning phase, each with a value exceeding $100 million. In the commercial building sector, the leading projects were a $400 million expansion to the Resorts World Hotel & Casino in Las Vegas and a $312 million Place Station Hotel tower, which is also in Vegas. The leading institutional projects were a $260 million education complex in Thompson, N.Y., and a $160 million expansion and renovation of the Lakeland Medical Center in Saint Joseph, Mich.