Leading Index for Commercial Real Estate Increased in December, Down 11% from Peak - InvestingChannel

Leading Index for Commercial Real Estate Increased in December, Down 11% from Peak

From Dodge Data Analytics: Dodge Momentum Index Improves 3% in December

The Dodge Momentum Index (DMI), issued by Dodge Construction Network (DCN), rose 3% in December to 186.6 (2000=100) from the revised November reading of 181.5. Over the month, commercial planning grew 1.0% and institutional planning improved 6.1%.

The Momentum Index ended the year 11% below the November 2022 peak, ultimately stabilizing as the year progressed. Regardless, the DMI averaged a reading of 184.3 in 2023, hitting levels of activity that haven’t been recorded since 2008,” stated Sarah Martin, associate director of forecasting for DCN. “While ongoing labor and construction cost issues will persist in 2024, a substantive amount of projects are sitting in the planning queue and will support construction spending going into 2025.”

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 full year.
emphasis added

Dodge Momentum Index Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 186.6 in December, up from 181.5 the previous month.

According to Dodge, this index leads “construction spending for nonresidential buildings by a full year”.  This index suggests some slowdown in 2024.  

Commercial construction is typically a lagging economic indicator.

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