By Sebastian Obando
- The Dodge Momentum Index, a benchmark that measures nonresidential building planning, increased 5.7% in September largely due to an influx of data center and education construction, according to Dodge Data & Analytics.
- The September reading landed less than 5% below an all-time high, the latest sign of the construction industry dismissing recession fears, said David Reaves, Dodge senior economist.
- “The gain in the momentum index and its components in September reassures us that despite whispers of recession, owners and developers are still looking to move forward with projects to meet demand,” said Reaves.
Demand for data center construction remains strong, but growing pains around the supply chain and inflation could mute the pace of building in the sector, said Reaves. The commercial component of the momentum index increased 2.9% in September largely due to data center construction, according to Dodge.
“Certain subsectors have shown resilience since the pandemic’s onset, such as data center projects, and continue to stream into the planning pipeline,” said Reaves. “However, looming challenges still remain for the sector, including supply shortages and the rising cost of materials that could chip away at the flow of new projects if inflation is not tempered.”
Institutional projects in planning rose 11.7%, largely due to a jump in research and development laboratory projects in the education sector, with solid contributions from health care and recreation builds entering the planning process, according to the report.
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