The Dodge Momentum Index rose 5.2 percent in April from the previous month, according to McGraw Hill Construction, a division of McGraw Hill Financial. 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.
After hesitating last fall, the Momentum Index is strengthening once again, as the uncertainty that restrained plans for new construction now appears to be easing. Gains have been reported for the Momentum Index in each of this year’s first four months, and since December 2012 the Momentum Index is up by 23 percent. The April increase brings the Momentum Index to 114.4, the highest level since mid-2009.
The April advance for the Momentum Index was largely the result of a strong upturn by its commercial segment. New plans for commercial buildings rose 8.5 percent in April, buttressed by several retail projects. Among the larger retail developments to enter planning in April were a new $71 million outlet center in Niagara Falls, N.Y., and a $60 million shopping center in San Francisco.
New plans for a 347-room luxury hotel planned for the Mall of America in Bloomington, Minn., gave the pipeline for commercial development a further boost. Meanwhile, the institutional segment in April showed only a slight 1.2 percent gain, as a decline in plans for new healthcare buildings offset a gain for education-related development, including a new $120 million veterinary building and lab at Texas A&M University.