Dive Brief:
- The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, rose 2.9% in August due to broad growth in both the commercial and institutional sectors, according to the Dodge Construction Network.
- Commercial planning, such as office, industrial and hotel projects, rose 1.9% in August, while institutional planning, which includes education, life sciences and healthcare projects, increased 5.7% during the month.
- “With the Fed’s September rate cut almost complete, the influence of selective lending standards and inflation should moderate next year, along with a modest upgrade in consumer demand,” said Sarah Martin , associate director of forecasting at Dodge Construction Network. “As a result, stronger planning activity was widespread in August, with most non-residential sectors experiencing growth.”
Diving knowledge:
Ahead of stronger market conditions expected next year, homeowners and developers continued to prepare the planning queue in August, Martin said.
For example, the planning of hotels and shops have been in constant expansion over the past few months, while data center projects continued to dominate global planning activity. Martin noted, however, that these increases had since moderated several months of very strong growth.
Even warehouse projects, later slowing down in recent yearsposted positive momentum over the past three months, according to Dodge. On the institutional front, health project planning boosted sector growth in August, Martin said.
From an annual perspective, the DMI soared 31% more than in August 2023, the report said. The commercial segment increased by 42% over the previous year’s levels, while the institutional segment increased by 8% in the same period.
A total of 30 projects valued at $100 million or more were planned during August. The most important projects in the commercial sector include:
- The $500 million portion of the Tract data center complex in Yuma, Arizona.
- The $462 million KDC data center campus in Irving, Texas.
The largest institutional projects to enter planning included:
- The $440 million Geisinger Medical Center tower in Danville, Pennsylvania.
- The $240 million academic and research facility at the University of Cincinnati in Ohio.
However, conditions in architectural firms stay slow The Architectural Turnover Index, an indicator of nine-to-12-month construction work, posted an eighteen-month decline in turnover, according to the latest data from the American Institute of Architects.
However, a bright side is emerging as fewer companies reported a decline in turnover in July compared to May. Despite this, more than half of companies are still experiencing soft business conditions, according to the report.
