Nonresidential Planning Dipped in September, According to Dodge Index

Sector still "very robust" despite slight decline, analyst says

Chart courtesy Dodge Construction Network

The Dodge Construction Network’s index of nonresidential projects that move into the planning stage declined a modest 4.2% in September, to a level of 208.6, but still was strong, a Dodge analyst said.

The latest monthly Dodge Momentum Index (DMI), released on Oct. 7, showed that commercial-project planning fell 7.8% in September, but institutional planning rose by 5.2%.

Sarah Martin, Dodge’s associate director of forecasting, said, “Despite the September downturn, the momentum index “remains at very robust levels.”

Martin said in a statement, “A surge in data center activity drove much of the recent rapid growth in the DMI—so as planning for that sector moderated over the month, overall commercial planning fell back."

She added that by the middle of next year, the Federal Reserve’s interest rate cuts “should spur planning projects to reach groundbreaking more quickly—leading to stronger nonresidential activity as 2025 progresses.”

Commercial planning activity “generally receded” in September,” Dodge said, with slowdowns in planning in the warehouse, office, and stores sectors.

On the positive side, hotels “have been gaining speed” in recent months, “expanding steadily” in September," Dodge said. Data centers still were well-represented among large projects, “but the rate at which planning projects entered the queue continued to moderate from the above-average levels of growth in recent months,” Dodge noted.

In the institutional category, the main growth in planning came in the education, health care and recreational market segments.

Dodge also said that 28 projects valued at $100 million or more entered the planning phase in September. Among the largest commercial projects were the $390-million Project Nova Data Center in Eagan, Minn.; and Phase 1 and 2 of the SNA Data Center in Cedar Rapids, Iowa, which was valued at $375 million per phase.

The biggest institutional projects included the $300-million Kairos Power R&D lab and the $215-million Phase Two of the Kentucky Exposition Center redevelopment in Louisville.

Dodge said that its momentum index has been an indicator of construction spending on nonresidential buildings 12 months in the future.

Tom Ichniowski has been writing about the federal government as ENR’s Washington Bureau Chief since the George H.W. Bush administration, and he has covered at least five major highway bills. A recognized expert on government policy on infrastructure and regulation, Tom is also a Baltimore native and Orioles fan who grew up rooting for Brooks and Frank Robinson. He is a graduate of Columbia College and Columbia’s graduate school of journalism, where he once used “unrelentless” in a headline.

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