Nonresidential construction planning fell in October for the second month in a row, according to the Dodge Construction Network.
The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, it fell 5.3% in October due to a drop in commercial and institutional projects, according to the report.
Institutional planning, which includes education, life sciences and healthcare projects, fell 2%, while commercial planning, which includes office, industrial and hotel projects, declined 6.7%, according to the report The decline in the commercial sector reflects a general moderation in data center planning, said Sarah Martin, associate director of forecasting for Dodge Construction Network.
“In addition to the normalization of data center planning, a moderate pullback in the number of planning projects for several other non-residential sectors also contributed to the decline in the Dodge Momentum Index for October,” he said Martin. “In any case, owners and developers remain confident next year’s market conditionsand the planning queue remains poised to spur stronger construction activity in 2025, following deeper rate cuts by the Fed.”
While hotel planning continued to gain momentum in October, most business categories posted declines, according to Dodge. At the institutional level, education and public sector planning increased, while health projects registered a reduction in activity.
From an annual perspective, the DMI remains 13% higher than in October 2023, according to the report. The commercial segment increased by 18% over last year’s levels, while the institutional sector increased by 3% in the same period.
However, data center projects have had an outsized impact on this planning growth over the past year. Without these types of projects, business planning would have been down 4% from last year, and overall DMI would have declined 2%, according to Dodge.
A total of 18 projects valued at $100 million or more entered the planning stage in October. Major commercial projects include:
- The $450 million EdgeCloudLink data center in Houston.
- The $410 million GFT Hotel in Arlington, Texas.
The largest institutional projects to enter planning included:
- The $300 million Kellogg School building at Northwestern University in Evanston, Illinois.
- The $270 million Primrose School of Stevens Ranch in San Antonio, Texas.
