by Calculated Risk on 7/08/2021 11:24:00 AM

From Dodge Data Analytics: Dodge Momentum Index Loses Steam In June

Following six months of consecutive gains, the Dodge Momentum Index fell to 165.8 (2000=100) in June, down 5% from the revised May reading of 175.1. 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 decline in June was the result of losses in both institutional planning, which fell 7%, and commercial planning, which lost 4%.

Uncertain demand for some building types (such as retail and hotels), higher material prices, and continued labor shortages are weighing down new project planning. Even with June’s decline, however, the Momentum Index remains near a 13-year high and well above last year. Compared to a year earlier, both commercial and institutional planning were significantly higher than in June 2020 (39% and 46% respectively). Overall, the Momentum Index was 41% higher.
emphasis added

Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 165.8 in June, down from 175.1 in May.

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 a pickup towards the end of the year, and growth in 2022 (even with the decline in the June index).