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 that construction activity will grow in 2024. Owners and developers tend to put projects into planning until well after economic conditions weaken. During the Great Recession, for example, the DMI did not substantially decline until 2009. Therefore, the anticipated mild economic growth in 2023 could cause the DMI to moderate over the year, but it is unlikely to fall below historical norms.”

In February, a total of 22 projects with a value of $100 million or more entered planning. The leading commercial projects included the $500 million Northwestern Mutual Headquarters in Milwaukee, Wisconsin, and the $375 million Legacy Highlands warehouse and retail project in Beaumont, California. Institutional projects were led by the $500 million University of Michigan Residence and Dining Hall in Ann Arbor, Michigan, and the $213 million Center of Innovation laboratory building in Emeryville, California.