The Dodge Momentum Index (DMI), issued by Dodge Construction Network, declined 0.9 percent in July to 193.4 (2,000 equals 100) from the revised June reading of 195.1. Over the month, the commercial component of the DMI remained relatively flat, ticking down 0.2 percent, while the institutional component fell 1.9 percent.
“While both segments of the index fell this month, underlying project data points to divergent trends in the nonresidential sector,” says Sarah Martin, associate director of forecasting for Dodge Construction Network. “In comparison to January 2023, commercial planning activity is down 10 percent through July, while institutional planning is up 16 percent. Distinctly large institutional projects entering planning in May temporarily inflated month-to-month trends, but activity has since ticked down. As we progress through the remainder of 2023, weaker commercial activity, resulting from tighter lending standards and higher interest rates, will counter sturdier institutional activity, bolstered by public funding and less sensitivity to interest rates.”
All commercial sectors pulled back, or remained flat, over the month of July. Hotel planning saw the largest month-over-month decline, marking four months of consecutive decline in the sector. July also saw a deceleration in the number of education and healthcare projects entering planning—the two largest institutional segments. While two sizable public projects entered planning and pushed activity in the sector to double-digit gains, it was not enough to push the institutional portion of the index positive. Year over year, the DMI remains 21 percent higher than in July 2022. The commercial and institutional components were up 13 percent and 35 percent respectively.
A total of 15 projects valued at $100 million or more entered planning in July. The largest commercial projects to enter planning included the $400 million Kraft Heinz Distribution Center in DeKalb, Ill., and the $190 million PTC warehouse/distribution facility in San Antonio, Fla. The largest institutional projects to enter planning included the $240 million Lexington High School in Lexington, Mass., the $216 million courthouse improvement project in San Luis Obispo, Calif., and the $200 million Solano Hall of Justice courthouse in Fairfield, Calif.
