Nonresidential Planning Index Slips08-09-19 | Economic News

Nonresidential Planning Index Slips

Still in Strong Territory

In July, there were 13 nonresidential projects each with a value of $100 million or more that entered planning, made up of nine commercial projects and four institutional projects. The leading commercial projects were a $370 million warehouse and cargo facility at the Anchorage International Airport and a $290 million mall redevelopment in Raleigh, North Carolina. The top institutional projects were both healthcare facilities - a $230 million hospital in Albuquerque, New Mexico, and a $200 million hospital in Pensacola, Florida.

The Dodge Momentum Index, a monthly measure of the first report for nonresidential building projects in planning, lost 4.6% in July to 138.9 down from the revised June reading. The lower number was due to a 10.2% drop in its institutional segment following a 6.0% increase in June. The commercial segment in July was basically flat, edging down a slight 0.3%.

Compared to a year ago, this July's Momentum Index was off 11.6%; with its commercial segment down a whopping 17.4% while its institutional segment was only 1.8% lower.

The index, issued by????Dodge Data & Analytics, has been shown to lead construction spending for nonresidential buildings by a full year.

After peaking in July 2018, the Momentum Index has generally receded, with this latest drop consistent with that trend. Much of the decline over the past year took place during the latter half of 2018, as December was reported 10.6% below the July 2018 peak. Since then, the descent for the Momentum Index has been more gradual, with the July 2019 reading down just 1.2% from last December.