NEW YORK – January 9, 2017 – The Dodge Momentum Index increased 2.9% in December to 136.7 (2000=100) from its revised November reading of 132.8. 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. After trending upward over the course of 2016, the Momentum Index is now at an eight-year high, although still more than 25% below its previous peak reached at the end of 2007. December’s gain was due to a 5.7% increase in the commercial component, which more than offset a 1.7% drop in the institutional component. After ending 2015 in a lull, commercial planning intentions posted remarkable strength in 2016, climbing 38% over the year. Meanwhile, institutional planning settled back in 2016, losing 6% after a strong 2015. This suggests that commercial construction activity has more room to grow in 2017 despite being at a more mature phase of its cycle, while planning in the institutional sector has yet to see the benefit of the numerous education-related bond measures passed in recent years.
In December, eight projects entered planning each with a value that exceeded $100 million. For the commercial building sector, the leading projects were a $400 million mixed-use building in Atlanta GA, that will include 640,000 square feet of office space and a hotel, and a $351 million office tower in San Francisco CA. The leading institutional projects were a $140 million renovation to the Quicken Loans Arena in Cleveland OH and a $130 million high school in Sherman TX.
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