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.
About Dodge Data & Analytics
Dodge Data & Analytics is the leading provider of data, analytics, news and intelligence serving the North American construction industry. The company’s information enables building product manufacturers, general contractors and subcontractors, architects and engineers to size markets, prioritize prospects, target and build relationships, strengthen market positions, and optimize sales strategies. The company’s brands include Dodge, Dodge MarketShare™, Dodge BuildShare®, Dodge SpecShare® and Sweets.
Dodge Momentum Index Moves Higher in January
The Dodge Momentum Index rose 2.4% in January to 126.4 (2000=100) from its December reading of 123.4. 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. The increase in January was the result of a 3.3% increase in institutional projects, and a 1.6% increase in commercial projects. On a year-over-year basis, the overall Index is 1.7% higher even though the commercial portion is down 6.8%. Commercial planning intentions started 2015 on an aggressive note before settling back by mid-year. Over the most recent few months commercial planning has been following a sawtooth pattern, but the overall trend has been positive as most commercial real estate fundamentals are improving. The institutional index on the other hand started 2015 on a weak note, but improved throughout the year and is now 14% higher than one year ago.
In January, 10 projects entered planning with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $270 million convention center hotel in San Diego, CA and a $140 million office and retail building in Atlanta, GA. For the institutional building sector, the leading projects were a $160 million renovation and addition at a USDA lab in Athens, GA and a $150 million hospital expansion in Corpus Christi, TX.