Nonresidential construction planning cooled in September after months of strong growth, according to the Dodge Construction Network.
The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, it decreased by 4.2% in September due to the fall in commercial projects, according to the report.
Commercial planning, which includes office, industrial and hotel projects, decreased by 7.8%, while institutional planning, which includes education, life sciences and healthcare projects, increased by 5.2% , according to the report.
While overall planning was flagged in September, the Dodge Momentum Index suggests continued strength in key sectors, said Sarah Martin, associate director of forecasting for the Dodge Construction Network.
“Despite this month’s decline, the Dodge Momentum Index remains at very robust levels,” Martin said. “A surge in data center activity drove much of the recent rapid growth in DMI, so as planning for this sector moderated during the month, overall business planning pulled back.”
Commercial planning fell through the following September positive dynamism of recent monthsespecially in the office, warehouse and retail sectors, according to the report. Hotel planning, on the other hand, continued its upward trend in September, marking five months of increasing activity.
According to the report, planning in the education, health and recreation sectors mainly drove institutional growth. Within that category, only religious project planning activity saw a decline in September, according to Dodge.
However, Martin expects non-residential construction planning to accelerate as financing conditions improve next year. By mid-2025, additional potential cuts should drive planning to arrive breaking soonershe said
From an annual perspective, the DMI remains 21% higher than in September 2023, according to the report. The commercial segment increased by 31% over the previous year’s levels, while the institutional segment increased by 4% in the same period.
A total of 28 projects valued at $100 million or more entered planning during September. The most important projects in the commercial sector include:
- The $390 million Project Nova data center in Eagan, Minnesota.
- Phases 1 and 2 of the SNA data center in Cedar Rapids, Iowa, valued at $375 million per phase.
The largest institutional projects to enter planning included:
- Kairos Power’s $300 million research and development laboratory facility in Albuquerque, New Mexico.
- The $215 million Phase 2 of the redevelopment of the Kentucky Exposition Center in Louisville, Kentucky.
