NEW YORK – June 7, 2016 – The Dodge Momentum Index rose
2.4% in May to 119.4 from its revised April reading of 116.6 (2000=100). 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 increase
for the Index in May was due to a 6.5% gain for projects entering planning in
the commercial sector, which more than offset a 3.4% decline for such projects
in the institutional sector. May’s increase places the overall Index 3.6%
higher than its year-ago level, suggesting further growth in construction
activity in 2016 despite the subdued first quarter GDP report and signs that
lending standards are beginning to tighten for commercial projects. The
commercial portion of the Index rose in May for the second consecutive month
and is at its highest level since September 2015. This recent improvement for
commercial projects provides some evidence that construction plans are moving
forward after the severe drop-off in planning that occurred with the financial
market instability in late 2015. At the same time, institutional planning is
1.3% lower than it was in May 2015, settling back for now from the heightened
activity reported in late 2015 and early 2016.
In May, six projects entered planning with a value that
exceeded $100 million. For the commercial building sector, the leading projects
were two warehouses in Staten Island NY – one valued at $304 million and one at
$141 million. For the institutional building sector, the leading project was a
$252 million neuroscience building at Stanford University in Palo Alto CA.
Source: Construciton.com
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