Institutional Segment Leads August Slide in Dodge Momentum Index with -6% Decline

摘要

The Dodge Momentum Index dropped -3% in August to 148.7 (2000=100) from the revised July reading of 154 points. The Momentum Index, issued by Dodge Data & Analytics, 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 planning component lost -2% in August, while the institutional component fell by -6%. Projects entering the earliest stages of planning have declined following the torrid pace set in the spring. The decline in August was the third consecutive drop in the Momentum Index, which is now off -14% from the most recent high in May, since May the commercial component is down -10% and the institutional component is -22% lower. This reversal comes as prices for materials used in nonresidential buildings increase in combination with a shortage of labor and a rising number of new COVID -19 cases from the Delta variant, all working in concert to undermine confidence in the fledgling construction recovery. There were some pockets of strength in August, however, as more data center, education and warehouse projects moved into planning relative to the prior month. Additionally, the overall level of the Momentum Index is +19% higher than one year ago; institutional planning was up +17% and commercial planning was +20% higher than last year.