Indicator for future construction spending ticks up in October
The Dodge Momentum Index (DMI), issued by Dodge Construction Network, increased +1% in October to 181.7 points (2000=100) from the revised September reading of 180.3. The DMI is a monthly measure of the initial report for nonresidential building projects in planning, shown to lead construction spending for nonresidential buildings by a full year.
“Heightened momentum in warehouse planning activity supported the commercial side of the Index this month, while muted education planning activity slowed the institutional portion,” said Sarah Martin, associate director of forecasting for Dodge Construction Network, in the press release. “Overall levels of planning activity remain robust and will support construction spending over the next 12 to 18 months.”
Improvements in warehouse planning helped support commercial growth, but despite strong progress in September, education and healthcare activity slowed down this month. Year over year, the DMI was -8% lower than in October 2022.
A total of 21 projects valued at $100 million or more entered planning in October. The largest commercial projects to enter planning included the $215-million Google Data Center in Kansas City, MO, and the $180-million Mauna Kea Beach Hotel in Waimea, HI. The largest institutional projects to enter planning included the $400-million Grand Sierra Resort Arena in Reno, NV.
Architects faced with decline in demand for project designs
The AIA/Deltek Architecture Billings Index (ABI) reported that business conditions at architecture firms continued to soften in October. For the third consecutive month, the ABI score was under 50 points, indicating that a significant share of firms is seeing a decline in billings.
“This report indicates not only a decrease in billings at firms, but also a reduction in the number of clients exploring and committing to new projects, which could potentially impact future billings, said Kermit Baker, AIA’s chief economist in the press release. "The soft conditions were evident across the United States as well as across all major nonresidential building sectors.”