The Dodge Momentum Index retreated 0.8 percent in March compared to February, 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.
The March Momentum Index came in at 113.8 (2000=100), down from a revised 114.8 in February and 118.3 in January. While the longer-term trend is still viewed as positive, the Momentum Index appears to be experiencing a temporary pause. Uncertainty, perhaps related to the weak employment growth at the start of the year, is the likely contributor to this short-term unease.
Uncertainty weighed on both the commercial and institutional sides of the Momentum Index in March. New plans for commercial buildings fell 1.0 percent, as declines for offices and hotels offset an increase for retail buildings. Despite the pullback for offices, the most significant commercial building to enter the planning pipeline in March was the $250 million 6 Houston Center Office Building in Texas.
New plans for institutional buildings dropped 0.7 percent in the latest month. A decline in the volume of education projects was only partially offset by the inclusion of two large amusement and healthcare-related developments – the $300 million E23 Casino and Hotel proposed in Albany, N.Y., and the $250 million Women and Children’s Hospital slated for Lakeland, Fla.