Dodge Momentum Index Moves 0.1 Percent Lower in May

The Dodge Momentum Index moved 0.1 percent lower in May to 129.2 (2000=100) from the revised April reading of 129.4. 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 commercial component of the Momentum Index rose 1 percent during the month, while the institutional component dropped 1.9 percent.

The resilience of the Momentum Index over the last two months has been remarkable in the face of the COVID-19 crisis and resulting economic recession. With May’s reading, the Momentum Index is down 17 perent from its most recent peak in July 2018. During the Great Recession, by contrast, the peak-to-trough decline was 62 percent. While the Momentum Index may move lower in the future, its present level continues to suggest that there are enough projects entering planning to allow construction to begin a modest recovery in the third quarter.

In May, 11 projects, each with a value of $100 million or more, entered planning. The leading commercial projects were a $213 million warehouse in Riverside, Calif., and a $195 million warehouse in Perris, Calif. The leading institutional projects were the $213 million Kaiser Permanente hospital in San Marcos, Calif., and the $100 million Indiana University Health Methodist Hospital in Indianapolis.