January's Dodge Momentum Index Reflects Construction Market's Mixed Momentum

The Dodge Momentum Index (DMI), rose +0.1% in January to 184.1 points (2000=100) from the revised December reading of 183.9 points. Over the month, commercial planning fell -1% and institutional planning improved +2.1%.
The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.
“Divergent trends between commercial and institutional planning continued in January, nullifying any growth on the overall Momentum Index,” said Sarah Martin, Dodge’s associate director of forecasting, in the press release. “Nevertheless, lending standards began to loosen in January, and the Fed is expected to begin cutting rates in the back half of the year. With this in mind, momentum should resume in commercial activity throughout 2024 as owners and developers gain confidence in market conditions for 2025.”
Slower growth in warehouse planning pulled down the commercial portion of the Index this month, while steady education and healthcare planning supported growth on the institutional side. Year over year, the DMI was -3% lower than in January 2023. The commercial segment was down -12% from year-ago levels, while the institutional segment was up +15% over the same period.
A total of 15 projects valued at $100 million or more entered planning in January. The largest commercial projects included the $200-million renovation of the historic Magnolia Hotel in Dallas, and the $169-million Microsoft Data Center in Leesburg, VA. The largest institutional projects included the $224-million NREL laboratory in Golden, CO, and the $223-million Wichita State University Biomedical building in Wichita, KS.