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Dodge Momentum Index Posts Strong January Gain02-07-17 | Economic News

Dodge Momentum Index Posts Strong
January Gain
Index Has Climbed 19.5 Percent Year-Over-Year

The commercial projects component of the Dodge Momentum Index remains near an eight-year high, despite dropping one percent in January.

The Dodge Momentum Index increased nearly four percent in January to a reading of 142.6, as its institutional component rose more than 12 percent for the month. The strong gain was offset by a slight one percent decline in the DMI's commercial segment.

Dodge Data and Analytics compiles the monthly index based on the first or initial reports of nonresidential building projects in planning, which typically lead construction spending by about a full year.

Commercial projects remain near an eight-year high, despite January's drop, and this suggests to Dodge Data that commercial building will see renewed strength in 2017.

"Institutional planning, meanwhile, has been subject to volatility over the past two years, as the presence or absence of large projects in health care, recreation, and transportation terminals have swayed that portion of the Momentum Index," Dodge Data said. "However, institutional planning projects trended higher through the end of 2016, which provides some optimism for institutional building activity in 2017."

The Dodge Momentum Index is up almost 19.5 percent year over year, but still remains 25 percent below its 2007 peak, the Wells Fargo Economics Group said.