HAMILTON, N.J. (April 7, 2023) — The Dodge Momentum Index (DMI), issued by Dodge Construction Network, slipped 8.6% in March to 183.7 (2000=100) from the revised February reading of 201.0. In March, the commercial component of the DMI fell 6.6%, and the institutional component decreased 12.9%.
“We are predicting the Dodge Momentum Index to work its way back to historical norms throughout 2023, concurrent with weaker economic conditions,” stated Sarah Martin, associate director of forecasting for Dodge Construction Network. “Lending standards for small banks in particular have substantially tightened as banking insecurity intensifies. As a result, owners and developers are more likely to pull back in the short-term, which would further contract the DMI as we continue into the year.”
Commercial planning in March was driven down by fewer projects in the office and warehouse sectors, decreasing 29% and 11%, respectively. Institutional planning weakened more substantially, as healthcare fell 17%, education dipped 6%, and amusement planning activity dropped 14%. On the upside, however, a steady flow of research and development laboratories entered the queue, supporting the otherwise weakening sector. Year over year, the DMI remains 24% higher than in March 2022. The commercial component was up 37%, and the institutional component was 2% higher.
A total of 18 projects with a value of $100 million or more entered planning in March. The leading commercial projects included a $300 million office building in Chicago, Illinois, and the $215 million 58 Logistics Center Industrial Park warehouse project in Bakersfield, California. Two projects at UT Southwestern in Dallas, Texas, led the institutional sector: the $425 million School of Public Health and Health Professions building, and the $348 million rehabilitation hospital.
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.
Watch Associate Director of Forecasting Sarah Martin discuss March’s DMI here.
March 2023 DODGE MOMENTUM INDEX