Nonresidential planning found a gear in June. The Dodge Momentum Index, which tracks projects entering the planning stage before they break ground, rose 6.8% to 225.1 from a downwardly revised 210.9 in May. Commercial planning led with a 7.3% gain, and institutional planning added 5.7%.
The index is a leading indicator, so a jump like this points to more work reaching construction roughly a year out. It doesn’t guarantee those jobs get built, but planning has to happen before anything does.
What’s driving the Dodge Momentum Index
“Nonresidential planning steadily improved in June, alongside strength in warehouse, recreational and data center planning,” said Sarah Martin, associate director of forecasting at Dodge Construction Network. Weaker spots stayed weak. Education, hotels, and retail planning were more subdued, the sectors most exposed to tight budgets and shaky consumer demand.
Forty projects worth $100 million or more entered planning during the month. The largest commercial entries were the $500 million Meadow Brook Technology Park data center in Middletown, Virginia, the $300 million Project Blue data center phase in Tucson, and the $300 million Data City data center in Laredo. On the institutional side, the $340 million Cleveland Clinic Avon campus expansion in Ohio topped the list.
Why the split keeps widening
Three of the four biggest projects in the month are data centers. That’s not an accident. Data center demand has become the load-bearing beam under the whole nonresidential number, and it’s papering over real softness in warehouse, office, and retail. Firms with data center contracts carry noticeably fatter backlogs than firms without.
Healthcare is the other bright spot. The Cleveland Clinic expansion and a steady run of hospital work reflect an aging population that needs beds regardless of where interest rates sit. That kind of demand doesn’t swing with the business cycle, which is exactly why owners and lenders like it.
For contractors, the read is the same one that’s held all year. Pick the segments with real momentum, and don’t count on a broad recovery to lift the rest.
Related on Exchange: the same Dodge Momentum vs. architects’ billings divergence.