Following a dip in April, the Dodge Momentum Index advanced 4 percent in May to 139.1 (2000=100) from its revised April reading of 133.7.
The Momentum Index 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.
In May, the commercial component of the Momentum Index increased 4.8 percent to an eight-and-a-half year high, which suggests that construction activity for commercial buildings will continue to rise over the next year, even with signs of decelerating improvement in market fundamentals (occupancies and rents).
The institutional component of the Momentum Index rose 2.9 percent in May, making a partial rebound after pulling back 12 percent in April. During this year's first quarter, the institutional component had re-established its often hesitant upward trend, with March up 21 percent compared to the end of 2016. May's moderate gain, following the April retreat, provides evidence that the upward trend for the institutional sector remains underway.
In May, six projects entered planning each with a value of $100 million or more. For the commercial building sector, the leading projects were the $245 million Camden Partners office tower in Camden, N.J., and the $140 million first phase of the Gateway of the Pacific office complex in San Francisco. The leading institutional building project was a $100 million detention center in Conroe, Texas.