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 planning is up 16%. Distinctly large institutional projects entering planning in May temporarily inflated month-to-month trends, but activity has since ticked down. As we progress through the remainder of 2023, weaker commercial activity, resulting from tighter lending standards and higher interest rates, will counter sturdier institutional activity, bolstered by public funding and less sensitivity to interest rates.”

A total of 15 projects valued at $100 million or more entered planning in July. The largest commercial projects included the $400 million Kraft Heinz Distribution Center in DeKalb, Illinois, and the $190 million PTC warehouse/distribution facility in San Antonio, Florida. Institutional planning was driven by the $240 million Lexington High School in Lexington, Massachusetts, and the $216 million courthouse improvement project in San Luis Obispo, California.