Steel Markets

Dodge Momentum Index Inches Higher on Commercial Planning

Written by Sandy Williams


The Dodge Momentum Index increased for a second consecutive month, climbing 1.8 percent in August to 126.5. The commercial component of the index increased 3.3 percent while the institutional component dipped 1.2 percent lower.

The index is a monthly measure of the first report for nonresidential building projects in planning, which has been shown to lead construction spending by a full year.

“The August increase in the overall Momentum Index is the second consecutive rise and a further sign that the construction sector continues to post a modest recovery following the large declines in April and June. This recovery, though, is uneven,” said Dodge Data & Analytics. “The commercial component has risen 9 percent from its June low and is just 13 percent below its 2018 peak fueled by increased planning activity for warehouse and office projects. The institutional component, however, has declined for five consecutive months and has yet to hit bottom. The institutional component is now 34 percent below its recent peak. “

A decline in state and local government revenue has led to budget cuts and a pullback on new public projects. Cancellation and delays of education building projects have put “significant downward pressure on the institutional component of the Momentum Index,” added Dodge.

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