Dodge Outlook: Starts Will Rise 6% in 2024, Only 2% This Year
The Dodge Momentum Index (DMI), issued by Dodge Construction Network, fell 2.0% in May to 180.5 (2000=100) from the revised April reading of 184.1. Over the month, the commercial component of the DMI fell 6.1%, while the institutional component improved 5.6%.
Commercial planning in May was negatively impacted by continued weakness in office and hotel planning activity. Institutional planning accelerated alongside steady growth in education, health and amusement projects. Year over year, the DMI remains 11% higher than in May 2022. The commercial and institutional components were up 7% and 18%, respectively.
A total of 30 projects valued at $100 million or more entered planning in May. The largest commercial projects included Buildings 3 and 4 of the Blue Sky Data Center project in Omaha, Nebraska, each valued at $466 million, and the $400 million Prime Data Center building in Avondale, Arizona. Leading the way on the institutional side were the $500 million Tennessee Performing Arts Center in Nashville, and the $440 million Rady Children’s Hospital ICU/EMS Pavilion in San Diego, California.
Dodge Construction Network expects the total dollar value of construction to rise just 2% in 2023, but is set for a three-fold jump next year, said Sarah Martin, associate director of forecasting in the group’s mid-year industry outlook update on June 15. Watch Associate Director of Forecasting Sarah Martin discuss May’s DMI here.
Total Construction
Construction spending during April 2023 was estimated at a seasonally adjusted annual rate of $1,908.4 billion, 1.2 percent (±0.7 percent) above the revised March estimate of $1,885.0 billion. The April figure is 7.2 percent (±1.2 percent) above the April 2022 estimate of $1,780.9 billion. During the first four months of this year, construction spending amounted to $566.7 billion, 6.1 percent (±1.0 percent) above the $533.9 billion for the same period in 2022.
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $1,500.7 billion, 1.3 percent (±0.3 percent) above the revised March estimate of $1,481.6 billion. Residential construction was at a seasonally adjusted annual rate of $845.4 billion in April, 0.5 percent (±1.3 percent)* above the revised March estimate of $841.6 billion. Nonresidential construction was at a seasonally adjusted annual rate of $655.3 billion in April, 2.4 percent (±0.3 percent) above the revised March estimate of $640.0 billion.
Public Construction
In April, the estimated seasonally adjusted annual rate of public construction spending was $407.7 billion, 1.1 percent (±1.2 percent)* above the revised March estimate of $403.4 billion. Educational construction was at a seasonally adjusted annual rate of $88.3 billion, 0.1 percent (±1.8 percent)* below the revised March estimate of $88.4 billion. Highway construction was at a seasonally adjusted annual rate of $124.7 billion, 1.3 percent (±3.5 percent)* above the revised March estimate of $123.1 billion.
American Institute of Architects
Save the date! Join Kermit Baker, AIA’s Chief Economist, on Thursday, July 20 at 2 PM ET to hear the next quarterly update of the industry’s latest economic data and what firms are reporting.
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AGC Needs Your Insight on Civil Construction
AGC and Procore are working to uncover the process, technology and regulatory trends for civil and infrastructure construction within the industry. Please take a few seconds to answer the following questions by July 3 and contribute to an industry report that AGC, in partnership with Procore, will release later this year. Everyone who completes the survey will receive a $20 gift, as well as a copy of the finished report. Take the survey!
ABC’s Construction Backlog Indicator Holds Steady in May
Associated Builders and Contractors reported on June 13 that its Construction Backlog Indicator remained unchanged at 8.9 months in May, according to an ABC member survey conducted May 20 to June 7. The reading is 0.1 months lower than in May 2022.
View the historic Construction Backlog Indicator and Construction Confidence Index data series.
Backlog in the infrastructure category ticked up again and has now returned to May 2022 levels. On a regional basis, backlog increased in every region but the Northeast.
