The Dodge Momentum Index rose 3 percent in January compared to 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.
January’s relatively strong gain brought the Momentum Index to 121.1 (2000=100), compared to a revised 117.6 in December 2013. Save for two minor dips in June and October of 2013, the Momentum Index has been on a steady climb for more than a year. As the environment for new nonresidential development continues to improve, the planning pipeline of nonresidential building projects has grown more active.
The latest month’s increase for the Momentum Index was driven by strength for its commercial building segment, while plans for institutional building held steady with December. Commercial building plans gained 5.7 percent, largely the result of increased planning activity for office and hotel development. The largest commercial projects to enter the planning pipeline in January were a $275 million St. Regis Hotel in Napa, Calif., a $200 million Renaissance Hotel at LA Live in Los Angeles, and a $120 million mixed-use development in Mountain View, Calif.
January’s stability for institutional building was aided by several large projects, including plans for further expansion of the San Ysidro Border Station in San Diego.