Dive brief:
- The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, it fell 8.6% in March — the biggest drop of the year so far — due to a slowdown in both institutional and commercial planning, according to the Dodge Construction Network.
- Institutional proposals, which include education, life sciences and healthcare projects, fell 17.2% during the month. At the same time, commercial jobs on boards fell by 3.2%.
- “While strong market fundamentals should support institutional planning this year, this side of the index is more at risk of a substantial correction after last year’s rally,” said Sarah Martin, director Dodge Construction Network forecasting associate. “The increase in laboratory construction in recent years may lead to a decline in planning demand as the market absorbs new supply in 2024.”
Diving knowledge:
The drop represents the second straight month of contraction, according to data from Dodge.
Martin attributed much of the decline on the institutional side to lower levels of educational planning, which includes life science labs and facilities.
For example, between February 2023 and February 2024, life sciences laboratory and research and development projects accounted for approximately 34% of the value of educational planning, and this proportion reached about 59% in a few months. In March, however, that share dropped to 7%, according to Dodge.
On the commercial front, slower growth in office and hotel planning continues to reduce overall planning levels.
Year-over-year, the Dodge Momentum Index was down 12% in March 2023. Commercial planning continues to fall 14% from last year, while institutional planning is also down 10% over the same period, according to Dodge.
The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, fell 8.6% in March, according to the Dodge Construction Network.
Courtesy of Dodge Construction Network
Architectural billing improves
Along with the DMI, the Architectural Turnover Index, an indicator of nine-to-twelve-month construction work, declined during thirteenth consecutive monthaccording to the most recent data from the American Institute of Architects.
However, the pace of overall turnover decline has been improving recently, suggesting that the recent slowdown may be reversing, according to the AIA. In addition, new project inquiries grew at their fastest pace since November.
A total of 14 projects valued at $100 million or more entered planning in March, according to Dodge. Major commercial projects include:
- Microsoft’s $215 million data center in San Antonio, Texas.
- Building B of the $158 million Melrod Data Center in Fredericksburg, Virginia.
The largest institutional projects to enter planning included:
- The $277 million Trident Health Hospital in Johns Island, South Carolina.
- The $220 million Sunset Amphitheater in McKinney, Texas.
