From Dodge Data Analytics: Dodge Momentum Index Declines In November
The Dodge Momentum Index fell 4% in November to 171.7 (2000=100) — down from the revised October reading of 178.1. The Momentum Index, issued by Dodge Construction Network, is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. In November, commercial planning fell 8% while institutional planning moved 5% higher.
The value of nonresidential building projects continues to move in a sawtooth pattern, alternating between a month of gains followed by a loss. Since the pandemic began, nonresidential building projects entering planning have been more volatile than in past cycles, likely driven by increased challenges from higher prices and lack of labor.
Despite these issues and a lack of underlying demand for some building types such as offices and hotels, the Momentum Index remains near a 14-year high. Compared to November 2020, the Momentum Index was 44% higher in November 2021. The commercial planning component was 45% higher, and institutional was 41% higher.
This graph shows the Dodge Momentum Index since 2002. The index was at 171.7 in November, down from 178.1 in October.
According to Dodge, this index leads “construction spending for nonresidential buildings by a full year”. This index suggested a decline in Commercial Real Estate construction through most of 2021, but a pickup towards the end of the year, and growth in 2022.