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Construction starts dip 1% in March despite encouraging signs in the residential sector

2024-04-26T13:56:00-04:00

Construction starts for March have dropped by 1% to a seasonally adjusted annual rate of $1.06 trillion, according to the latest figures released in Dodge Construction Network's new Construction Starts Index.

For the month, nonresidential building starts went down 9%, while nonbuilding starts dipped another 7%, and residential starts were up by 1%. On a year-to-date basis, the total number of all starts was up 13% compared to the same three-month period in 2023. Residential starts increased by 24%, while nonbuilding starts gained 16%, and nonresidential building starts went up by 2%.

“The construction sector has hit a soft patch to start 2024,” Richard Branch, the chief economist for Dodge Construction Network, said. “However, this should not be overly surprising given high rates and restrictive credit. There are bright spots though, as single-family starts are moving higher and federal dollars are lifting nonbuilding starts. The recent hot inflation readings likely mean that rate...

Dodge Momentum Index continues to decline in March due to office, hotel, and education planning slowdown

2024-04-08T12:46:00-04:00

The latest Dodge Momentum Index (DMI) information for March has shown a continued decrease in economic activity, dropping 8.6% to a new score of 164.0 from February's revised total of 179.5.

Over the month, commercial planning fell 3.2%, while institutional planning dropped 17.2%. The decline in commercial performance is attributed by Dodge Construction Network to slow growth in office and hotel planning, while the institutional sector decline is linked to a decline in education planning.

“While strong market fundamentals should support institutional planning this year, this side of the Index is more at risk for a substantive correction after last year’s growth,” explained Sarah Martin, associate director of forecasting for Dodge Construction Network. “Much of the decline on the institutional side is credited to lower levels of education planning. Between February 2023 and February 2024, life science and R&D laboratory projects account for roughly 34% of education planning value, wi...

Construction starts fall 8% in February, driven by sharp nonresidential decline

2024-03-21T18:46:00-04:00

The total value of construction starts for February fell by 8% to a seasonally adjusted annual rate of $1.07 trillion, according to the latest data from Dodge Construction Network.

For the month, nonresidential building starts dropped 16%, while nonbuilding starts were down 3%, and residential starts fell by 2%.

For the 12 months ending February 2024, total construction starts were up 2% from the 12 months ending February 2023. Nonresidential building starts were down 2%, while residential starts were 4% lower, and nonbuilding starts were up 19% on a 12-month rolling sum basis.

“Construction activity was hit hard by higher rates and more restrictive credit standards,” Richard Branch, the chief economist for Dodge Construction Network, said in a news release. “Starts struggled over the past several months as the lagged effect of higher rates impacted projects moving forward through the planning process. Additionally, the significant deficit of skilled labor led to further delays — e...

Dodge Momentum Index drops slightly for February, hampered by weak commercial planning

2024-03-07T17:12:00-05:00

The latest Dodge Momentum Index (DMI) information for February has shown a slight decrease in economic activity, dropping 1.4% to a new score of 180.5 from January’s revised total of 183.0.

Over the month, commercial planning fell 2.3% while institutional planning ticked up 0.1%. The drop in the commercial sector was caused primarily by a lag in new office planning. On the institutional side, slow healthcare and amusement planning was offset by a strong showing in the education sector to maintain a flat reading for the month.

“Weaker office and healthcare planning constrained nonresidential planning in February,” Sarah Martin, the associate director of forecasting for Dodge Construction Network, said in a press release. “However, the Index remains 25% higher than where it was just two years ago. Most other categories showed growth over the month, and Dodge remains optimistic that nonresidential planning will stay elevated throughout 2024 alongside rising confidence in 2025 market co...

Construction starts up another 1% in January, continuing winter improvements

2024-02-22T18:29:00-05:00

The latest construction starts statistics revealed by Dodge Construction Network for January report that the total number of starts grew 1% to a seasonally adjusted annual rate of $1.16 trillion.

Nonbuilding starts rose 9% during the month, while nonresidential building starts fell by 2% and residential starts remained flat. For the year ending in January 2024, total construction starts were down 1% from the previous 12 months. Nonresidential building starts were down 5%, while residential starts were 8% lower. Nonbuilding starts were also up 17% on a 12-month rolling basis.

“Construction starts are struggling to make headway in the new year,” Richard Branch, the chief economist for Dodge Construction Network, said in a news release. “Construction starts will continue to struggle early on in 2024 as higher interest rates and tight credit standards are slowing down projects moving through the planning cycle to start. The Federal Reserve is expected to cut rates later this year. That...

January's Dodge Momentum Index increases slightly thanks to gains in the institutional sector

2024-02-08T17:14:00-05:00

The latest Dodge Momentum Index (DMI) report has shown a slight increase of 0.1% for January to a new total of 184.1, indicating an improvement over December’s revised figure of 183.9.

Over the month, commercial planning fell by 1.0%, while institutional planning improved by 2.1%. Year over year, the DMI is now 3% lower than January 2023's totals. The commercial segment was down 12% from year-ago levels, while the institutional segment was up 15% over the same period.

"Divergent trends between commercial and institutional planning continued in January, nullifying any growth on the overall Momentum Index. Nevertheless, lending standards began to loosen in January, and the Fed is expected to begin cutting rates in the back half of the year. With this in mind, momentum should resume in commercial activity throughout 2024 as owners and developers gain confidence in market conditions for 2025," Sarah Martin, the associate director of forecasting for Dodge Construction Network, said in a...

Construction starts climb 20% in December

2024-01-19T16:46:00-05:00

The latest data from Dodge Construction Network has shown an impressive 20% growth in new construction starts to a seasonally adjusted annual rate of $1.2 trillion for the month of December, offering encouraging statistics for the industry in a turnaround from November’s ten-month low.

For the latest month, nonresidential building starts were up 37%, while the residential and nonbuilding sectors improved by 8% and 13%, respectively. For the full year ending in December, total construction starts were down 4% compared to the previous 12-month cycle.

Graphic courtesy of Dodge Construction Network

“Construction starts ended the year on a positive note,” Richard Branch, chief economist for Dodge Construction Network, said in a statement. “Looking ahead, the new year provides promise that positive momentum will continue to build. The planning queue is stabilizing, and the promise of lower rates should spur construction onward. While hurdles remain, including scarce labor and tight credit,...

December's Dodge Momentum Index increases by 3% thanks to commercial sector gains

2024-01-12T12:32:00-05:00

The latest Dodge Momentum Index (DMI) has posted an increase of 3% for December to a new total of 186.6, showing a marked improvement over November’s revised figure of 181.5.

For the month, commercial planning grew 1.0%, and institutional planning improved 6.1%. Hotels and data centers were the primary drivers of the sector, while the institutional sector was propelled by healthcare and public buildings. Overall, the commercial sector was down 9% from 2022, while the institutional sector was up 14% over the same time period.

“The Momentum Index ended the year 11% below the November 2022 peak, ultimately stabilizing as the year progressed. Regardless, the DMI averaged a reading of 184.3 in 2023, hitting levels of activity that haven’t been recorded since 2008,” Sarah Martin, the associate director of forecasting for Dodge Construction Network, said in a statement. “While ongoing labor and construction cost issues will persist in 2024, a substantive amount of projects are sitting in ...

Economic Pressures and Labor Challenges: How 2023 Shaped Architecture and Construction Industries

2023-12-28T07:49:00-05:00

The architecture industry was impacted this year by market volatility, rising interest rates, and evolving labor dynamics. This unusual business climate was reflected not only in the Architecture Billings Index (ABI) and the Dodge Momentum Index (DMI) but also in the pattern of job openings around the country, also observed through Archinect Jobs, the leading job board for the architecture industry in the USA.

AIA predicts slower growth in non-residential construction through 2023 and 2024

Hints of 2023's challenges began in late 2022, with a downturn in both the ABI and DMI to kick off 2023. This signaled a cautious approach by firm owners and clients alike amidst tightening credit conditions and rising interest rates. This recessed business landscape was quickly echoed in the job market, as seen by a substantial 51.9% decrease in job advertising volume in January 2023 compared to January 2022. This trend of reduced job postings continued throughout the year, with monthly declines r...

November construction starts drop 15% to new ten-month low

2023-12-20T14:00:00-05:00

Construction starts for the month of November fell by 15% to new ten-month lows at a seasonally adjusted annual rate of $927 billion, according to the latest figures from the Dodge Construction Network.

For the month, nonresidential building starts fell 29%, residential starts lost 6%, and nonbuilding starts dropped 2%. In terms of year-to-date figures through November 2023, total construction starts were down by 4% when compared to the same period last year. Residential and nonresidential starts were also down 14% and 7%, respectively, with nonbuilding starts recorded to be up by 19%.

“Construction starts are deeply feeling the impact of higher rates,” Richard Branch, the chief economist for the Dodge Construction Network, said in a statement. “While the Federal Reserve seems poised to start cutting rates in the New Year, the impact on starts will lag. As a result, starts are expected to be weak through the mid-point of 2024 before growth resumes.”

Graphic: Dodge Construction Net...

Dodge Momentum Index drops 1% for November, reversing October's gains

2023-12-07T13:06:00-05:00

The latest Dodge Momentum Index (DMI) for November has indicated a 1% drop to 179.2 a month after posting a revised total of 181.7 for October that was propelled by gains in the commercial sector.

Over November, both the commercial and institutional components fell by 1%. DCN says these results were driven largely by the weak performance of the educational segment, despite gains in healthcare and public spaces. Year over year, the index was 14% lower than in November 2022. The commercial segment was down 20% from November 2022 levels, and the institutional segment was up 2% over the same period.

“While both portions of the Momentum Index saw slower momentum in planning, overall levels remain steady and will support construction spending in 2024 and 2025,” stated Sarah Martin, associate director of forecasting for DCN. “Nonresidential planning activity will remain constrained from stronger growth amidst ongoing labor and construction cost challenges.”

Graphic: Dodge Construction Net...

Construction starts for October drop 7%, led by declines in the nonbuilding sector

2023-11-22T13:48:00-05:00

New data from the Dodge Construction Network has construction starts falling 7% in October to a seasonally adjusted annual rate of $1.1 trillion. The figures follow September’s 6% decline and represent another 4% year-to-year decline when compared to the same data sets from October 2022.

Nonbuilding and residential starts fell 32% and 1%, respectively. Nonresidential building starts gained 8% during the month.

Nonresidential starts were also up 8% year-to-date, an adjusted annual rate of $490 billion, though Dodge notes the sector would have fallen 28% if not for an abnormally strong spate of manufacturing plants. Residential starts represented another $385 billion. Nonbuilding starts fell to $231 billion year-to-date through October; however, nonbuilding starts were up by 20% overall.

Graphic courtesy of Dodge Construction Network

“Construction starts have weakened over the last two months as high interest rates and tight credit have restrained activity,” Richard Branch, the chief...

Dodge Momentum Index posts 1% increase for October, driven by commercial sector gains

2023-11-07T18:06:00-05:00

The data just released in the Dodge Momentum Index (DMI) reporting for the month of October indicate a 1.0% increase to 181.7 over September’s revised total of 180.3.

The increase was propelled by a 2.0% rise in the commercial component, while the institutional component dropped by 1.4%. Year over year, the DMI came in 8% lower than in October of 2022. The commercial segment was down by 14%, while the institutional segment was up by 7%.

“Heightened momentum in warehouse planning activity supported the commercial side of the Index this month, while muted education planning activity slowed the institutional portion,” Sarah Martin, the Associate Director of Forecasting for Dodge Construction Network, said in a statement. “Overall levels of planning activity remain robust and will support construction spending over the next 12 to 18 months.”

Graphic: Dodge Construction Network

A total of 21 projects valued at $100 million or more entered planning in the month. The largest commercial ...

Boost in institutional planning drives 3% Dodge Momentum Index rise in September

2023-10-06T18:11:00-04:00

September's Dodge Momentum Index (DMI) rose 3% to 182.5 from the revised August reading of 178.0. Over the month, the DMI’s commercial component fell 1%, while the institutional component rose 9%.

The dip in the commercial segment was driven by weaker office planning. On the other hand, the institutional segment was spurred by stronger education, notably life science buildings, and healthcare planning activity. Year over year, the DMI was 5% lower last month than in September 2022. The commercial sector was 12% below last year’s September levels, while the institutional sector was up 12% over the same time period.

“Solid demand for data centers, life science labs, and hospitals supported the uptick in nonresidential planning activity last month,” said Associate Director of Forecasting for Dodge Construction Network, Sarah Martin. “While month-to-month trends can be volatile, year-to-date trends show an overall decrease in commercial planning, offset by more institutional projects en...

Construction starts for August rise 6% with huge gains in the manufacturing sector

2023-09-20T14:42:00-04:00

The latest data from the Dodge Construction Network has indicated a 6% total rise in construction starts to a seasonally-adjusted rate of $1.3 trillion for the month of August, following a 17% rise that was recorded in July thanks to gains in the multifamily and nonbuilding sectors.

Nonresidential starts for the month rose by 40% thanks to a 285% increase in the manufacturing sector. Residential and nonbuilding starts both fell by 1% and 14%, respectively, while starts in the commercial and nonresidential building sectors both rose by 8% and 24% each.

“Despite the August gain, the construction sector is running uphill,” Dodge Construction Network chief economist Richard Branch said. “Fear of an imminent recession seems to have abated, which should provide a boost of confidence to the sector. However, higher interest rates, labor shortages and significantly tighter lending standards will weigh down starts in the final quarter of the year. This will persist for the foreseeable future...

Dodge Momentum Index sees 6.5% dip due to double-digit decline in institutional planning

2023-09-08T18:11:00-04:00

The August Dodge Momentum Index (DMI) reading dipped 6.5% to 178 from the revised July reading of 190.3. Over the month, the commercial component of the DMI fell 1.6%, and the institutional component saw a double-digit decline of 14.8%.

The notable contraction in the institutional sector was driven by a deceleration in education, healthcare, and amusement planning activity. Stronger hotel planning made up for weaker office activity resulting in a milder drop in the commercial component. Year over year, the DMI remained 4% higher than in August 2022, with the commercial and institutional sectors up 3% and 7%, respectively.

“Overall activity remains above historical norms, but weaker market fundamentals continue to undermine planning growth,” said Associate Director of Forecasting for Dodge Construction Network, Sarah Martin. “It’s likely that the full year of tightening lending standards and high interest rates has begun to affect institutional planning, which has otherwise been resi...

Construction starts rose 17% for July, propelled by gains in key areas

2023-08-16T17:43:00-04:00

Construction starts rose a total of 17% for July to a seasonally-adjusted rate of $1.2 trillion, according to the just-released report from Dodge Construction Network.

The latest data also indicated a 7% year-to-date drop in total construction starts when compared to the July 2022 totals. Nonresidential starts fell another 6%, while residential starts went up by another 20%.

“Construction starts have plateaued and are making little headway,” Richard Branch, the chief economist for Dodge Construction Network, said in a press release. “Higher interest rates, labor shortages, and material prices continue to impact the flow of construction starts — resulting in little forward momentum over the last 12 months. The lag in nonresidential building projects entering the planning stage will slow starts as the year progresses, which should be offset by rising infrastructure activity.”

Graphic courtesy of Dodge Construction Network

The sole cause for the 38% rise in the nonbuilding sector was t...

Stagnation in commercial construction sees 1% Dodge Momentum Index decline

2023-08-07T17:03:00-04:00

Dodge Construction Network’s Dodge Momentum Index (DMI) fell by 0.9% in July to 193.4 from the revised June reading of 195.1. Last month, the commercial component remained relatively flat, declining only by 0.2%, and the institutional component fell 1.9%.

Planning in all commercial sectors pulled back or remained flat in July. Hotel planning experienced the largest dip, which marks four consecutive months of decline. The two largest institutional sectors, education and healthcare, saw a deceleration in the amount of projects entering planning. Year over year, the DMI is 21% higher than in July 2022, with the commercial components up 13% and 35%, respectively.

“While both segments of the Index fell this month, underlying project data points to divergent trends in the nonresidential sector,” said associate director of forecasting for Dodge Construction Network, Sarah Martin. “In comparison to January 2023, commercial planning activity is down 10% through July, while institutional pla...

Total construction starts fall in June, continuing wavering trend in 2023

2023-07-24T13:20:00-04:00

Total construction starts continue to fluctuate, with a 9% dip in June resulting in a seasonally adjusted annual rate of $1 trillion, according to the latest Dodge Construction Network report. Nonresidential starts led the decline, falling 14%. Nonbuilding starts fell 9%, and residential starts dropped 4%.

Year-to-date through June 2023, total construction starts were 5% below that of 2022. Residential and nonresidential starts were down 24% and 2%, respectively, while nonbuilding increased by 29%. For the 12 months ending June 2023, total construction starts were 9% higher than that of 2022. Nonbuilding starts were 34% higher, and nonresidential building starts were up 25%; however, residential starts saw a 17% decline.

“Construction starts are oscillating — up one month and down the next,” said Dodge Construction Network chief economist Richard Branch. “The presence, or absence, of mega-projects is a key influencer in this trend. Nevertheless, high interest rates and tightening l...

Dodge Momentum Index falls again in June due to sharp decline in institutional planning

2023-07-11T13:45:00-04:00

The Dodge Momentum Index (DMI) continued its decline in June with a 2.5% decrease resulting in a reading of 197.3 from a revised May reading of 202.4. Over the course of last month, the commercial component rose 3.1%, while the institutional component dipped 10.5%.

According to the Dodge Construction Network, commercial planning in June was driven by a boost in data center and hotel planning projects. Institutional planning, however, was pulled back by a dip in education and healthcare activity. Year over year, the DMI is 25% higher than in June 2022, with the commercial and institutional components up 17% and 39% respectively.

Graphic: Dodge Construction Network

“A deceleration in institutional planning caused the Momentum Index to decrease in June,” said Dodge Construction Network’s associate director of forecasting, Sarah Martin. “Project activity in this segment pulled back from the robust highs of the last three months but continued to dwarf year-ago levels. In contrast, growth...

Construction starts increase again in May following brief April decline

2023-06-20T17:13:00-04:00

New data from the Dodge Construction Network (DCN) has shown construction starts increasing to a seasonally adjusted annual rate of $1.11 trillion for the month of May following the 4% decline for April that ended a steady two-month series of gains.

Nonresidential starts rose 8% over the previous month thanks to gains in the manufacturing sector, while starts in the residential category were recorded to have declined at a 4% rate. Nonbuilding starts for the month rose a dramatic 24%, while the single-family sector recorded a 2% decrease following four consecutive months of gains. On a year-to-date basis, total construction starts were 6% below the first five months of 2022 overall.

Graphic courtesy of Dodge Construction Network

“May’s data is another sign that the construction sector is slowly splitting in two,” Richard Branch, the chief economist for the network, said in a statement. “Public dollars are flooding into the manufacturing and infrastructure sectors, leading to signific...

Dodge Momentum Index continues decline in May, led by poor commercial planning activity

2023-06-07T16:47:00-04:00

Data from the latest Dodge Momentum Index (DMI) shows a slight decline of 2.0% to 180.5 for May, continuing a three-month downturn that follows April’s revised total of 184.1 and the 183.7 figure that was recorded in March.

For the month, the DIM’s commercial component fell to 6.1%, while the institutional component improved to 5.6%.

The Dodge Construction Network notes that the commercial sector was impacted by continued poor showings in hotel and office planning. In terms of year-over-year numbers, the DMI is now 11% higher than in May of last year. (Dodge notes that the commercial and institutional components were up 7% and 18%, respectively.)

Graphic: Dodge Construction Network

“The DMI dipped in May amid sustained weakness in commercial planning activity,” Sarah Martin, the associate director of forecasting for Dodge Construction Network, said in a statement. “Conversely, institutional planning steadily improved over the month as research and development laboratories and hospi...

Construction starts fall 4% in April due to steep decline in manufacturing

2023-05-19T14:21:00-04:00

According to new Dodge Construction Network data, total construction starts fell 4% in April to a seasonally adjusted annual rate of $1.04 trillion. This marks a slowdown after two consecutive months of increases.

Nonresidential starts led the decline, falling 22%. This was balanced by a 7% rise in nonbuilding starts and a 12% increase in residential building starts. On a year-to-date basis through April, total construction starts were 7% below the first four months of 2022. Residential starts were down 27%, and nonresidential and nonbuilding starts rose 7% and 16%, respectively. Total construction starts are 11% higher than the 12 months ending April 2022, with nonresidential and nonbuilding starts showing gains of 34% and 24%, respectively, while residential starts marked a 13% decline.

“The construction sector continues to sweep its economic worries under the rug, even with inflation, unstable banking, and the potential breach of the U.S. debt ceiling,” said Dodge Construction N...

Dodge Momentum Index declines in April, driven by weak commercial planning figures

2023-05-05T13:04:00-04:00

New data from the latest Dodge Momentum Index (DMI) has shown a decline of 5.1% to 180.9 for April, continuing a downward trend in the wake of March’s revised total of 190.6 that has been led largely by economic turmoil in the commercial planning sector.

The data showed an 8.0% decline in the commercial component, while the institutional component was up 0.3%.

Year over year, the DMI stands 11% higher than April 2022. The commercial and institutional components were up 7% and 17% respectively for the year, despite longstanding concerns about the viability of large offices post-Covid.

Graphic: Dodge Construction Network

“On par with our expectations, the Dodge Momentum Index continued to recede in April, due to declining economic conditions and ongoing banking uncertainty,” Sarah Martin, the associate director of forecasting for the Dodge Construction Network, said in a press release. “Weaker commercial planning is driving the DMI’s decline, as it is more exposed to real-time econom...

Construction starts rose 19% in March as concerns over the impact of the Silicon Valley Bank collapse loom

2023-04-20T13:40:00-04:00

March data from the Dodge Construction Network (DCN) has shown an increase in construction starts of 19% to what is now a three-month high despite concerns over the industry’s ties with Silicon Valley Bank following the financial institution’s controversial collapse at the beginning of the Month.

Nonresidential starts for the month rose by 33%, with residential starts up by 5%. Nonbuilding starts increased by 17% to a seasonally-adjusted rate of $263 billion, led by a 35% increase in environmental public works projects and a 16% boost in gas and utility plants. Overall year-to-date nonbuilding starts gained a total of 12% for Q1.

Graphic courtesy of Dodge Construction Network

“Construction starts activity has yet to see the impact of tightening financial conditions in the wake of the failure of Silicon Valley and Signature Banks,” Richard Branch, the chief economist for Dodge Construction Network, said in a statement. “Several large manufacturing projects are breaking ground; pushing...

Dodge Momentum Index falls in March as banking insecurity intensifies

2023-04-07T11:56:00-04:00

The Dodge Momentum Index (DMI) continued its seesawing trend in March, falling 8.6% to 183.7 from the revised February reading of 201.0. Last month, the DMI’s commercial component fell 6.6%, and the institutional component fell 12.9%.

The dip in commercial planning was attributed to fewer projects in the office and warehouse sectors, which fell 29% and 11%, respectively. Institutional planning was weakened by a 17% fall in healthcare, a 6% decrease in education, and a 14% drop in amusement planning. On a positive note, an influx of research and development laboratories have entered the queue. Year over year, the DMI is 24% higher than in March 2022, with the commercial component up 37% and the institutional component 2% higher.

“We are predicting the Dodge Momentum Index to work its way back to historical norms throughout 2023, concurrent with weaker economic conditions,” said Sarah Martin, associate director of forecasting for Dodge Construction Network. “Lending standards for sma...

Construction starts rebound for February with 6% rise

2023-03-21T17:10:00-04:00

The latest data from the Dodge Construction Network (DCN) indicates a 6% rise in total construction starts for February, reversing January’s declines to a new seasonally adjusted annual rate of $912.8 billion.

During the month, residential and nonresidential building starts rose by 11% and 9% respectively, while nonbuilding starts declined by 5% overall.

“February construction starts were a mixed bag that led to marginal growth,” said DCN chief economist Richard Branch said. “Single family units posted a gain for the first time in 13 months, and manufacturing starts continued to be very robust, showing signs of promise early into 2023. However, the downturn in commercial and institutional building starts could very well be the beginning of an anticipated slow-down as the construction sector pulls back in the face of higher interest rates and lagging economic growth. While this ebbing should be comparatively mild, some construction verticals could face extreme stress as the year prog...

Dodge Momentum Index sees slight rebound in February

2023-03-07T11:05:00-05:00

The Dodge Momentum Index (DMI) in February increased by 1.9% to 203.0 from the revised January reading of 199.3. Last month, the commercial component of the DMI rose 1.4%, and the institutional component increased by 2.9%.

The rise in commercial planning was driven by a nearly 20% growth in office planning activity, as data centers steadily entered the planning queue. Institutional planning was led by growth in education and healthcare projects, especially the continued investment in research laboratories. On a year-over-year basis, the DMI is 43% higher than in February 2022. The commercial component is up 55%, and the institutional component is 22% higher.

The continued elevation in the DMI should provide hope that construction activity will grow in 2024

“The Dodge Momentum Index returned to growth in February after falling 9% last month,” said associate director of forecasting for Dodge Construction Network Sarah Martin. “The continued elevation in the DMI should provide hope th...

Construction starts dip in January as fewer mega projects break ground

2023-02-23T14:24:00-05:00

Total construction starts took a turn in January, falling 27% to a seasonally-adjusted annual rate of $865.6 billion, according to Dodge Construction Network. Last month, nonresidential building starts fell 38%, residential starts decreased by 20%, and nonbuilding starts declined by 16%.

Compared to January 2022, total construction was 14% lower in January 2023. Nonresidential building starts were down 2%, residential fell 34%, and nonbuilding starts rose 10%. For the year ending January 2023, total construction starts were 13% higher than the year ending January 2022. Nonresidential starts were 36% higher, residential starts fell 6%, and nonbuilding starts were up 19%.

“January’s decline in construction starts should not be taken as the beginning of a cyclical downturn in the industry,” said Richard Branch, chief economist for Dodge Construction Network. “Numerous mega-projects have begun over the last few months, obscuring the underlying trend in construction activity. While some ...

Dodge Momentum Index falls in January, snapping 10 consecutive months of gains

2023-02-07T13:12:00-05:00

A new report by Dodge Construction Network has revealed that the Dodge Momentum Index (DMI) fell 8.4% in January to 201.5 from the revised December reading of 220.0. Last month, the commercial component of the DMI fell 10.0%, and the institutional component decreased by 4.7%.

The weakness in commercial planning was due to declines across office, warehouse, retail, and hotel activity. Decreases in education and amusement projects drove down institutional planning, which negated gains in healthcare and public planning. However, on a year-over-year basis, the DMI is 32% higher than in January 2022. The commercial component is up 40%, and the institutional component is 16% higher.

“The Dodge Momentum Index weakened in January, after 10 consecutive months of gains. While planning activity slowed, the Index remains elevated, and the volume of projects remains steady,” said Sarah Martin, Associate Director of Forecasting for Dodge Construction Network. “After such strong growth in 2022, w...