Construction planning posts largest drop since March | Dump Trucks Charlotte NC

Columbus Ohio Dump Truck Company Brief:

• The Dodge Momentum Index, a benchmark that measures nonresidential building planning, dropped 6.5% in August due to slowdowns in both commercial and institutional projects, according to the Dodge Construction Network.
• August’s drop means the index, which peaked in December 2022 and typically leads actual construction spending by 12 months, has now contracted for six straight months. It was also the largest drop in the index since March. 
• “Overall activity remains above historical norms, but weaker market fundamentals continue to undermine planning growth,” said Sarah Martin, associate director of forecasting for Dodge Construction Network. “It’s likely that the full year of tightening lending standards and high interest rates has begun to affect institutional planning, which has otherwise been resistant to these market headwinds.”

Dump Trucks Columbus OH Insight:

The commercial component of the index, which includes retail, warehouse and office, dropped 1.6% in August, while the institutional sector, encompassing healthcare and education projects, tumbled 14.8%. On a positive note, the DMI remained 4% higher than in August 2022.

The sizable decline in the institutional sector stems from a deceleration in education, healthcare and amusement planning activity, according to Dodge.

“It’s likely that the full year of tightening lending standards and high interest rates has begun to affect institutional planning, which has otherwise been resistant to these market headwinds,” Martin said in the release. 

On the commercial side, stronger hotel planning offset weaker office activity. That caused just a mild regression in the commercial segment over the month, according to Dodge.

But both commercial and institutional planning will continue to be constrained during the final months of 2023, said Martin.

Meanwhile, architectural activity, which also provides a gauge for upcoming construction work, remained flat on a national level, according to the most recent data from the American Institute of Architects. The report pointed to slowdowns in public sector projects and overall financing issues.

A total of 22 projects valued at $100 million or more entered planning in August, according to Dodge. The largest commercial projects included:

• The $322 million Phase 5 of the Northern Virginia Gateway Data Center in Fredericksburg, Virginia.
• The $225 million Kroger Distribution Center in Las Vegas.

The largest institutional projects to enter planning included:

• The $420 million Westborough Life Sciences Park in Westborough, Massachusetts.
• The $168 million Freeman Health System Hospital in Pittsburg, Kansas.