Dodge Construction Network’s (DCN) monthly Momentum Index (DMI) reported a deceleration in institutional planning, contributing to a 2.5% decline in June’s index. For the month, the DMI dropped to 197.3 from a revised May reading of 202.4. Institutional planning recorded a 10.5% decline, while commercial planning rose 3.1%.
The DMI is a monthly measure of the initial report for nonresidential building projects in planning, shown to lead construction spending for nonresidential buildings by a full year.
Sarah Martin, associate director of forecasting for DCN, says that while institutional planning has slowed following “robust highs of the last three months,” the segment still shows higher year-over-year readings. In fact, institutional planning was up 39% from a year ago, DMI data shows.
On the other hand, commercial planning ticked up due to increased data center and hotel planning projects. The commercial segment was 17% higher than a year ago.
However, growth in the commercial segment may be fleeting, says Martin. She explains that continued elevation in interest rates and increasingly tight lending standards could weigh down the sector in the latter half of the year.
DCN reports that 22 projects valued at $100 million or more entered planning in June. The largest commercial projects to enter planning included the $335 million Queensbridge Collective Office Tower in Charlotte and the $280 million Old Potomac Church Data Center in Stafford, Va. Bolstering the institutional planning queue was the $710 million Medford Life Science Park project in Medford, Mass., and the $157 million Center of Innovation building in Emeryville, Calif.