Electrical Marketing's Leading Economic Indicators - Aug. 23 2024

Building permits see major dip in July

Building permits in July were at 1,396,000, -4% below the revised June rate of 1,454,000 and -7% below the July 2023 rate of 1,501,000. Single-family authorizations in July were at a rate of 938,000, -0.1% below the revised June figure of 939,000, according to U.S. Census Dept. data.

DMI sees big bump in July

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, increased +7.9% in July to 216.3 (2000=100) from the revised June reading of 200.5. During the month, commercial planning increased by +6.8%, and institutional planning expanded by +11.1%.   
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 year. 
“While data centers have had an outsized influence on nonresidential planning activity in recent months, more momentum is building across many other major sectors and diversifying the story behind July’s growth,” said Sarah Martin, associate director of forecasting at Dodge Construction Network, in the press release. “The potential Fed rate cut in September is becoming increasingly more likely, alongside slower inflation and weaker labor market conditions. This is likely driving owners and developers to remain optimistic about 2025 market conditions and pushing more projects into the planning queue.” 
Data centers continued to play an important role in growth, and retail planning has been steadily accelerating over the past eight months. On the institutional side, health-care was the primary driver of this month’s expansion. In July, the DMI was +17% higher than in July of 2023. The commercial segment was up +35% from year-ago levels, while the institutional segment was down -14% over the same period.  
A total of 23 projects valued at $100 million or more entered planning in July. The largest commercial projects included the $483-million Microsoft SAT82 Data Center in Castroville, TX; and the $480-million Yorkville Data Center Campus in Little Rock Township, IL. The largest institutional projects to enter planning were the $325-million UCSF Children’s Hospital renovation in Oakland, CA, and the $278-million Memorial Hermann Cypress Hospital expansion in Cypress, TX.