PRESS RELEASE
HAMILTON, NJ – August 6, 2021 – The Dodge Momentum Index (DMI) fell to 155.8 (2000=100) in July, a 6% decline from the revised June reading of 164.9. Issued by Dodge Data & Analytics, the DMI 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.
Both components of the DMI slipped in July. Commercial planning fell 3%, while institutional planning dropped 9%.
"I don't think we should be sounding the alarm bells just yet," cautioned Richard Branch, Chief Economist for Dodge Data & Analytics. "This could certainly be just a settling back to levels that are more consistent with what building markets can sustain, given where the economic recovery is."
The DMI had posted strong gains through much of the winter and spring as the economy and building markets began to stabilize following the recession. While the economy has continued its forward progress through the summer, the DMI has regressed somewhat as higher material prices and shortages of skilled labor continue to exert a strong influence over the construction sector.
Despite the declines in June and July, the DMI remains near levels last seen in 2018. Compared to a year earlier, the DMI was still 25% higher than in July 2020 — institutional planning was up 27% and commercial planning was 25% higher than last year.
A total of 11 projects with a value of $100 million or more entered planning during July. The leading commercial projects were a $240-million Microsoft Data Center in San Antonio, TX and a $200-million Amazon, Inc. fulfillment center (Project Basie) in Woodburn, OR. The leading institutional projects were the $225-million Baptist Health Hardin Medical Pavilion in Elizabethtown, KY, and the $200-million AdventHealth Narcoossee campus in Orlando, FL.
The pressures caused by higher material prices and labor are unlikely to ease anytime soon and, when added to the rising number of COVID-19 cases caused by the Delta variant, raises concerns that the nascent recovery in construction may stall in the months ahead.
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About Dodge Data & Analytics:
Dodge Data & Analytics is North America’s leading provider of commercial construction project data, market forecasting & analytics services and workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities that help them grow their business. On a local, regional or national level, Dodge empowers its customers to better understand their markets, uncover key relationships, seize growth opportunities, and pursue specific sales opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry.
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