Construction of nonresidential building projects accelerated in October in the United States, according to a new report by Dodge Construction Network. The Dodge Momentum Index increased 10% in October to 181.2 from the revised September reading of 164.6.
The Momentum Index is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. In October, commercial planning rose 14% and institutional gained 3%.
The organization reports the value of nonresidential building projects entering planning has staged a solid recovery this fall. That has lifted the Momentum Index to its highest level in nearly 14 years, following a near-moribund summer of activity. The commercial sector has shown strength, having reached its highest level since the inception of the Index. The October gain in the Momentum Index was driven by increased planning in warehouses, offices, and healthcare structures. Compared to a year earlier, the Momentum Index was 47% higher in October 2021. The commercial planning component was 59% higher, and institutional was 26% higher.
A total of 20 projects with a value of $100 million or more entered planning in October. The leading commercial projects were a $450 million Walmart Distribution Center in Lyman, South Carolina, and a $400 million Facebook data center in Los Lunas, New Mexico. The leading institutional projects were the second and third phases of the California Northstate University Medical Center in Sacramento, valued at $500 million for each phase.
Dodge Construction Network points out the dollar value of projects in the planning stage is impressive and portends a healthy rise in nonresidential building construction starts on tap for 2022. However, that expectation must be balanced against rising material costs, shortages of key goods, and a lack of skilled labor that will work to keep growth rates modest next year.
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