dodgeanalyticslogo-500x200

Dodge Momentum Index Moves Higher in October

Leading Indicator of Construction Spending

dodge1

dodge2

The Dodge Momentum Index grew 4.1% in October to 133.6 from its revised September reading of 128.3 (2000=100). The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. October’s gain nearly reversed the loss in September, and returns the Momentum Index to the rising trend that began earlier in the year. The commercial component of the Momentum Index rose 6.1% in October, and is 20% above last year. This suggests that despite being in a more mature phase of the building cycle, commercial construction has room for further growth in the coming months. The institutional component of the Momentum Index increased 1.4% in the month, and is now 10% higher than one year ago.

 

In October, 12 projects entered planning each with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $270 million office building in Jersey City, NJ and a $250 million office tower in Somerville, MA. The leading institutional projects were a $250 million hospital in New York, NY and a $140 million high school in Upper Arlington, OH.

 

Dodge Data & Analytics’ monthly Dodge Momentum Index is a twelve month leading indicator of construction spending for non- residential building.

 

The index is an early and accurate leading indicator of future construction spending, based on a correlation ratio of 0.91 (1.0 is perfect correlation) between construction planning reports as reported by Dodge and the Commerce Department’s Construction Spending Put in Place.

 

Importantly, changes in the Dodge nonresidential new planning data lead changes in Commerce spending put in place by twelve months. The strength of the new Dodge Momentum Index is that it’s based on proprietary planning data from Dodge’s national network of reporters. These are individual, real- life projects, many of which will become construction starts down the road and generate construction spending dollars.

 

The strong relationship established between the Dodge Momentum Index and the Commerce Department’s Construction Spending Put in Place, with its full year of lead time, means that the index provides value to building product manufacturers, AEC firms, industry professionals, as well as economists and Wall Street analysts.

 

For more information, download the Dodge Momentum Index white paper here.

 

Posted in Construction Software and tagged .