Economy Watch: Nonresidential Planning Ticks Up in October

The Dodge Momentum Index rose in October, climbing 13.2 percent to 130.9 (2000 =100) from the revised September reading of 115.6, according to Dodge Data & Analytics. The move higher in October nearly reversed the erosion of the past four months (including September’s sizable decline), with October posting healthy gains in both sectors, commercial and institutional development.

The index is a monthly measure of the initial reports for nonresidential building projects in planning. Activity at this stage tends to lead construction spending for nonresidential buildings by a full year.

Room for growth

From September to October, the commercial component of the Momentum Index advanced 16.8 percent, while the institutional component grew 8.3 percent. Year-over-year, the Momentum Index is now up 6.1 percent, with the commercial component up 5.5 percent and the institutional component up 6.9 percent.

October’s increase supports the belief that building activity has further room to grow during this cycle, Dodge said. While month-to-month activity could continue to be volatile, there are enough projects in the pipeline to sustain growth into 2018.

In October, 20 U.S. projects each with a value of $100 million or more entered planning. In the commercial building sector, the leading projects were a pair of Facebook data centers in Sandston, Va., valued at $400 million and $200 million. The leading institutional projects were a $480 million hospital in Dallas and a $160 million hospital tower in Seattle.