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Dodge Momentum Index Descends in July

The Dodge Momentum Index retreated 4.6% in July to 138.9 (2000=100), down from the revised June reading of 145.6. The Momentum Index, issued by Dodge Data & Analytics, 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 lower reading for the Momentum Index in July was due to a 10.2% pullback by its institutional segment following a 6.0% increase in June. The commercial segment in July was basically flat, slipping a slight 0.3%.

After peaking in July 2018, the Momentum Index has generally receded, with the latest month’s drop consistent with that trend. Compared to a year ago, the Momentum Index in July 2019 was down 11.6%, with its commercial segment down a steep 17.4% while its institutional segment was down a relatively modest 1.8%. 

Much of the decline for the Momentum Index over the past year took place during the latter half of 2018, as December was reported 10.6% below the July 2018 peak. Since then, the descent for the Momentum Index has been more gradual, with the July 2019 reading down just 1.2% from last December.

In July, there were 13 projects each with a value of $100 million or more that entered planning, made up of nine commercial projects and four institutional projects. The leading commercial projects were a $370 million warehouse and cargo facility at the Anchorage International Airport in Alaska and a $290 million mall redevelopment in Raleigh, N.C. The leading institutional projects were both healthcare facilities – a $230 million hospital in Albuquerque, N.M., and a $200 million hospital in Pensacola, Fla.