Economy

Dodge Momentum drops on moderating data center growth

October 7, 2024

Slowing growth in data center planning caused the Dodge Momentum Index (DMI) to pull back in September. The index’s decline followed five months of growth since hitting a two-year low in March.

Dodge Construction Network (DCN) reported a DMI of 208.6 in September, a 4.2% drop from 217.7 the month before. Despite a 5.2% improvement in institutional planning, commercial planning contracted 7.8%.

“A surge in data center activity drove much of the recent rapid growth in the DMI – so as planning for that sector moderated over the month, overall commercial planning fell back,” explained Sarah Martin, DCN’s associate director of forecasting.

On the commercial side, planning for warehouses, offices, and stores slowed. Hotel planning, meanwhile, has been accelerating over the past five months and expanded further in September. And while data centers continued to account for the bulk of large projects, their growth rate slowed, according to DCN.

Education, healthcare, and recreational projects drove the September expansion in institutional planning, while religious planning declined.

Despite the index’s monthly decline, Martin pointed out that it “remains at very robust levels.”

Compared to a year ago, September’s DMI was 21% higher, with the institutional segment rising 4% and the commercial segment surging 31%.

“By mid-2025, the Fed’s rate cuts should spur planning projects to reach groundbreaking more quickly – leading to stronger nonresidential activity as 2025 progresses,” Martin added.

The DMI tracks the value of nonresidential construction projects entering the planning stages and typically leads construction spending by about 12 months.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.