Dodge Momentum Index falls to start year

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The Dodge Momentum Index has dropped 5.1% in January to 143.7 (2000=100) from the revised December reading of 151.5.

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 commercial component of the Momentum Index was 7.8% lower in the month, while the institutional component was down 0.9%.

The fourth quarter of 2017 was particularly strong for the Momentum Index, and January’s retreat returns it to a more sustainable level. On a year-over-year basis, the Momentum Index is 7.7% higher, with both the commercial and institutional components showing growth over January 2017. This suggests that nonresidential building construction should continue to post moderate gains in 2018.

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In January, five projects each with a value of $100 million or more entered planning. For the commercial sector, the leading projects were a $200 million office building in Boston MA and a $152 million warehouse in Banning CA. The leading institutional projects were a $440 million water park in Branson MO and a $123 million assisted living facility in Milwaukee WI.

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