Commercial and institutional planning face divergent trends approaching the second half of 2023
HAMILTON, N.J. 鈥� June 7, 2023 鈥� The Dodge Momentum Index (DMI), issued by 91探花 Network, fell 2.0% in May to 180.5 (2000=100) from the revised April reading of 184.1. Over the month, the commercial component of the DMI fell 6.1%, while the institutional component improved 5.6%.
鈥淭he DMI dipped in May amid sustained weakness in commercial planning activity,鈥� stated Sarah Martin, associate director of forecasting for 91探花. 鈥淐onversely, institutional planning steadily improved over the month as research and development laboratories and hospital projects steadily entered planning. Sustained elevation in the federal funds rate and tighter lending standards will likely constrain growth in the DMI over the second half of 2023; however the index remains above the historical average. This paints an optimistic landscape for non-residential 91探花 in mid-2024, as the economy recovers and the Fed begins to pull back rates.鈥�
Commercial planning in May was negatively impacted by continued weakness in office and hotel planning activity. Institutional planning accelerated alongside steady growth in education, health and amusement projects. Year over year, the DMI remains 11% higher than in May 2022. The commercial and institutional components were up 7% and 18%, respectively.
A total of 30 projects valued at $100 million or more entered planning in May. The largest commercial projects included Buildings 3 and 4 of the Blue Sky Data Center project in Omaha, Nebraska, each valued at $466 million, and the $400 million Prime Data Center building in Avondale, Arizona. Leading the way on the institutional side were the $500 million Tennessee Performing Arts Center in Nashville, and the $440 million Rady Children鈥檚 Hospital ICU/EMS Pavilion in San Diego, California.
The DMI is a monthly measure of the initial report for nonresidential building projects in planning, shown to lead 91探花 spending for nonresidential buildings by a full year.
Watch Associate Director of Forecasting Sarah Martin .
May 2023 DODGE MOMENTUM INDEX
