Leading Index for Commercial Real Estate Decreased 9% in March

From Dodge Data Analytics: Dodge Momentum Index Fell 9% in March

The Dodge Momentum Index (DMI), issued by Dodge Construction Network, fell 8.6% in March to 164.0 (2000=100) from the revised February reading of 179.5. Over the month, commercial planning fell 3.2% and institutional planning dropped 17.2%.

“In 2023, commercial planning decreased while institutional planning notably improved, sitting 29% above year-ago levels in February 2024. While strong market fundamentals should support institutional planning this year, this side of the Index is more at risk for a substantive correction after last year’s growth,” stated Sarah Martin, associate director of forecasting for Dodge Construction Network. “Much of the decline on the institutional side is credited to lower levels of education planning. Between February 2023 and February 2024, life science and R&D laboratory projects account for roughly 34% of education planning value, with that share reaching 59% in some months. In March, however, that share dropped to 7%. The surge of lab construction in recent years may lead to decreased planning demand as the market absorbs new supply in 2024. Likely, lower lab volumes will result in education planning returning to its long-run, and more sustainable, average.”
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The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.
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Click on graph for larger image.

This graph shows the Dodge Momentum Index since 2002. The index was at 164.0 in March, down from 179.5 the previous month.

According to Dodge, this index leads "construction spending for nonresidential buildings by a full year".  This index suggests a slowdown in 2024.  

Commercial construction is typically a lagging economic indicator.