by Calculated Risk on 6/09/2019 10:30:00 AM

From Dodge Data Analytics: Dodge Momentum Index Falls in May

The Dodge Momentum Index fell 1.0% in May to 141.0 (2000=100) from the revised April reading of 142.4. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The May decline for the Momentum Index was due entirely to a 6.9% drop by its commercial component, as its institutional component rose 8.1%.

The Momentum Index continues to settle back from the most recent highs achieved last summer. On a year-over-year basis, the Momentum Index in May was 9.2% lower than a year ago, with a 16.0% drop by its commercial component outweighing a 1.8% gain by its institutional component. Although the trend for the overall Momentum Index is downward, so far the pullback has been measured, suggesting that there remains enough nonresidential building projects in the pipeline to support near term stability for construction activity.
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Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 141.0 in May, down from 142.4 in April.

According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".  This suggests a slowdown in CRE later this year.