The Dodge Momentum Index retreated 2.3 percent in June from the previous month, according to McGraw-Hill Construction, a division of The McGraw-Hill Companies. 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 Momentum Index for June came in at 92.2 (2000=100), down from May’s revised 94.4. This marked the second monthly decline in a row, following the 0.7 percent pullback in May. The drop for the Momentum Index during the most recent two months mirrors the recent softening for the U.S. economy, and suggests that the slower pace of economic growth is causing some deceleration in plans for future development, McGraw-Hill Construction said.
The 2.3 percent decline for the Dodge Momentum Index in June was the result of a divergent pattern by its two main segments. The institutional building segment of the Momentum Index fell 10.2 percent, weighed down in June by a decreased amount of planning projects for education buildings. In contrast, the commercial building segment of the Momentum Index climbed 5.9 percent in June, regaining some upward momentum after sliding in May.
The commercial building segment in June was helped in particular by an uptick in new plans for office projects, including a new office campus in Mountain View, Calif., and a new corporate office building in Everett, Wash. An increased volume of projects at the planning stage was also reported for stores and warehouses.