The Dodge Momentum Index rose 5.9 percent in March, 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 March increase lifted the Momentum Index to 109.4 (2000=100), marking the fourth gain in a row following the modest retreat that took place from August through November last year. The pause for the Momentum Index during the second half of 2012 coincided with the uncertain political and economic environment at that time. More recently, the four straight gains for the Momentum Index suggest that owners and developers now perceive the climate for construction to be improving, as shown by the rising amount of commercial and institutional building projects reaching the planning stage.
The March increase for the Momentum Index was evenly split between its commercial and institutional components. Large projects that boosted the commercial segment of the planning pipeline in March included the $200 million Maui Outlet Mall in Kihei, Hawaii, a $135 million headquarters for New Balance in Brighton, Mass., and a $75 million headquarters for British Petroleum in Houston.
The institutional segment was buttressed in March by the inclusion of several new amusement-related projects. The largest of these developments was the $400 million MGM/AEG Arena in Las Vegas. MGM’s recently announced plans for this 20,000 seat arena also include retail and dining space.