The Dodge Momentum Index jumped 9.2% in December to 134.6 (2000=100) from the revised November reading of 123.3. 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 commercial component of the Momentum Index rose 14.0%, while the institutional component rose by 0.3%.
The gain in the commercial component of the Momentum Index was heartening even though the increase was mostly the result of a sizeable increase in warehouse planning. The warehouse sector has been one of the few areas of construction that has flourished during the pandemic thanks to increased demand for online shopping. For the full year of 2020, the Dodge Momentum Index lost 4.8% from 2019. The institutional component of the Momentum Index dropped 13.5%, while the commercial component increased 0.8%.
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Click on graph for larger image.This graph shows the Dodge Momentum Index since 2002. The index was at 134.6 in December, up from 123.3 in November.
According to Dodge, this index leads "construction spending for nonresidential buildings by a full year". This index suggests a decline in Commercial Real Estate construction through most of 2021, but maybe some pickup towards the end of the year.
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