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The Dodge Momentum Index increased 10% in October to 181.2 (2000=100), from the revised September reading of 164.6. 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 October, commercial planning rose 14% and institutional gained 3%.
The value of nonresidential building projects entering planning has staged a solid recovery this fall. It has lifted the Momentum Index to its highest level in nearly 14 years, following a near-moribund summer of activity. The commercial sector has shown strength, having reached its highest level since the inception of the Index.
A total of 20 projects with a value of $100 million or more entered planning in October. The leading commercial projects were a $450 million Walmart Distribution Center in Lyman, SC, and a $400 million Facebook data center in Los Lunas, NM. The leading institutional projects were the second and third phases of the California Northstate University Medical Center in Sacramento, valued at $500 million for each phase.
The dollar value of projects in the planning stage is impressive and portends a healthy rise in nonresidential building construction starts on tap for 2022. However, that expectation must be balanced against rising material costs, shortages of key goods, and a lack of skilled labor that will work to keep growth rates modest next year.