Dodge Index Rises 12 Percent
Institutional Segment Fuels the Drive
The Dodge Momentum Index, a measure of the first or initial construction plans filed for nonresidential building projects, jumped to a reading of 133.5 in September, up from 126.2 in August.
A 12 percent jump in institutional planned projects led the Dodge Momentum Index to climb 5.8 percent in the month of September.
The Dodge Momentum Index is a measure of nonresidential building projects from the time their first planning reports are filed. Those initial steps typically precede construction spending by a full year.
State and local governments finance many projects in the institutional category, Dodge Data and Analytics said. Fueled by institutional projects, the Dodge Index moved to 133.5, up from a reading of 126.2 in August.
Dodge Data and Analytics established the index in 2000 and set its benchmark at 100.
While the institutional segment trended higher, commercial construction "is at a more mature stage of its recovery and planning has been relatively more stable, " Dodge Data said. Planning in the commercial category increased just 1.8 percent in September.
Eight large projects that entered the planning stages in September each exceeded $100 million in value. These were split between commercial and institutional. In the commercial sector, a $330 million office building for Fannie Mae in Washington D.C., and a $150 million alteration of an office complex in Plano, Texas, filed building plans. In the institutional sector, a $400 million hospital in Rockford, Ill., and a $230 million clinic addition in Weston, Fla., did the same.
The commercial sector moved from 139.5 in August to 142.0 in September. The institutional segment improved from 109.7 in August to 122.9 in September.
Corporate executives have expressed caution about the national economy in its present state and its near-term prospects, as reflected in the 2015 CEO Economic Outlook Index.
The index, maintained by the Business Roundtable, is a composite of projections from chief executive officers about current sales, and plans for capital spending and hiring during the next six months.
Overall, the index declined 7.2 points to 74.1 in the third quarter, from 81.3 in the second quarter.
CEOs now believe the U.S. gross domestic product will expand by 2.4 percent in 2015, which would be a 0.1 percentage point decline from the second-quarter projection, the Business Roundtable said.
Their expectations for sales dropped 11.1 points to 101.4, from 112.5. Their predictions on hiring declined 7.9 points to 50.7, from 58.6. Capital spending was cut 2.4 points to 70.3, from 72.7.
"The downward trend in CEO plans for investment and hiring continues to reflect reasonable caution regarding near-term prospects for modest U.S. growth, " Randall Stephenson, chairman of Business Roundtable and chairman and CEO of AT&T Inc., said. "Business plans could be negatively affected if Washington fails to act on federal budgets, the debt ceiling and tax extenders. "