Planning for Commercial Building Grows, Dodge Finds

(Illustrations: Dodge Construction Network)

The Dodge Momentum Index grew 3.7% in May to 211.2, indicating an increase in planning for both commercial and institutional buildings, the Dodge Construction Network reported.

During the month, commercial planning grew 0.8% while institutional planning jumped 10.5%.

“Nonresidential planning continued to accelerate in May, primarily driven by strong project activity on the institutional side of the Dodge Momentum Index,” Dodge Associate Director of Forecasting Sarah Martin said. “Planning momentum moderately improved on the commercial side as well, following subdued growth in that sector over the last few months outside of data centers.”

Martin noted increased economic and policy uncertainty will continue to contribute to increased volatility in the project data, “but in aggregate, planning activity is on steady footing,” she added.

The index is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.

“After a very strong April, data center projects returned to more typical levels in May and constrained overall commercial planning,” the report said. Without data center projects, the commercial portion of the index would have improved 5% and the entire index would have grown 7% over the month.

“Accelerated warehouse and hotel planning drove the commercial portion of the index, while office and retail planning remained flat,” the report concluded. “On the institutional side, a strong uptick in education and recreational projects drove this month’s gains, partially offset by a mild slowdown in healthcare planning.”