The Dodge Momentum Index, issued by Dodge Construction Network, increased 6.1 percent in April to 173.9 from the revised March reading of 164.0.
Over the month, commercial planning improved 12.6 percent and institutional planning dropped 6.3 percent.
“The Dodge Momentum Index saw positive progress in April, alongside a deluge of data center projects that entered the planning stage,” says Sarah Martin, associate director of forecasting at Dodge Construction Network. “Outsized demand to build Cloud and AI infrastructure is supporting above-average activity in the sector. Most other categories, however, faced slower growth over the month.
“Across these industries, it’s likely that owners and developers are grappling with uncertainty around interest rates and lending standards, thus delaying their decisions to push projects into the planning queue,” Martin adds. “If interest rates begin to tick down in the latter half of 2024, more substantive growth in nonresidential planning activity should follow.”
A flood of data center projects entered planning in April, causing robust growth in the commercial segment of the momentum index, while traditional office and hotel projects continued to face slower momentum, according to Dodge. Warehouse planning remained nearly flat. On the institutional side, education and healthcare planning activity receded again – in part, driven by another month of weak life science and R&D laboratory activity.
Year over year, the momentum index was 1 percent lower than in April 2023. The commercial segment was up 6 percent from year-ago levels, while the institutional segment was down 15 percent over the same period.
In April, a total of 25 projects valued at $100 million or more entered planning.
The largest commercial projects included the $1 billion Convergent Technology Park in Remington, Virginia, the $630 million Dulles Digital Data Center (Buildings 8 and 6) in Dulles, Virginia, and the $330 million Google Red Hawk Data Center (Phase 2) in Mesa, Arizona.
The largest institutional projects to enter planning were the $275 million Win-River Resort & Casino in Redding, California, and the $254 million AdventHealth Hospital in Weaverville, North Carolina.
The momentum index 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.