Dodge Momentum Index falters in August

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Dodge momentum August 2018

The Dodge Momentum Index fell 2.9% in August to 164.1 (2000=100) from the revised July reading of 169.0. 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.

Pushing the Momentum Index lower in August was its commercial component, which dropped 6.1% from July. The commercial component had been on a strong run since the beginning of the year, rising 25% in the January to July period as improved business confidence likely pushed building intentions higher.

aug 2018 momentum data

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While commercial planning did fall in August, the trend remains positive fueled by strong economic growth and still-healthy real estate fundamentals. The institutional component has been on a much more restrained trajectory this year, moving 11% higher from January to July, reflecting the influence of public spending on this segment. In August, the institutional component moved up an additional 2.5%.

In August, nine projects each with a value of $100 million or more entered planning. The two leading commercial projects were the $250 million renovation of the flagship Tiffany & Co. store on Fifth Avenue in New York NY and a $140 million office building in Stockton CA. The leading institutional projects were the $450 million Rush University Outpatient Center in Chicago IL and the $265 million Children’s Hospital of Wisconsin in Wauwatosa WI.

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