The Dodge Momentum Index (DMI), issued by Dodge Construction Network, improved 6.6% (2000=100) in December to 222.2 from the revised November reading of 208.3. In December, the commercial component of the DMI rose 8.4%, and the institutional component ticked up 2.7%.
“One of the key construction storylines for 2022 was the return of enthusiasm and optimism in prospects for nonresidential growth,” stated Richard Branch, chief economist for Dodge Construction Network. “While some of that will likely erode in 2023 as economic growth wanes, increased demand for some building types like data centers, labs, and healthcare buildings will provide a solid floor for the construction sector.”
Commercial planning in December was supported by broad-based increases across office, warehouse, retail and hotel planning. Meanwhile, institutional growth focused on recreation and public building, with education and healthcare planning activity remaining flat. On a year-over-year basis, the DMI was 40% higher than in December 2021; the commercial component was up 51%, and institutional planning was 20% higher.
The DMI is a monthly measure of the initial report for nonresidential building projects in planning, shown to lead construction spending for nonresidential buildings by a full year.
This graph shows the Dodge Momentum Index since 2002. The index was at 222.2 in December, up from 208.3 in November.
According to Dodge, this index leads “construction spending for nonresidential buildings by a full year”. This index suggests a solid pickup in commercial real estate construction into 2023.