Nonresidential construction planning scaled back in October for the second consecutive month, according to Dodge Construction Network.
The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, fell 5.3% in October due to a downturn in commercial and institutional projects, according to the report.
Institutional planning, which includes education, life science and healthcare projects, fell 2%, while commercial planning, which includes offices, industrial and hotel projects, decreased 6.7%, according to the report. The decline in the commercial sector reflects an overall moderation in data center planning, said Sarah Martin, associate director of forecasting at Dodge Construction Network.
“In addition to data center planning normalizing, a moderate pullback in the number of planning projects for several other nonresidential sectors also contributed to the decline in the Dodge Momentum Index for October,” said Martin. “Regardless, owners and developers remain confident in next year’s market conditions, and the planning queue remains poised to spur stronger construction activity in 2025, following deeper rate cuts by the Fed.”
Although hotel planning continued to gain momentum in October, most commercial categories posted declines, according to Dodge. On the institutional side, education and public sector planning increased, while healthcare projects posted reduced activity.
From an annual perspective, the DMI remains 13% higher than in October 2023, according to the report. The commercial segment increased 18% from last year’s levels, while the institutional segment posted a 3% increase over the same period.
However, data center projects have had an outsized impact on that planning growth over the past year. Without these types of projects, commercial planning would have been down 4% from last year, and the overall DMI would have decreased by 2%, according to Dodge.
A total of 18 projects valued at $100 million or more entered the planning stages in October. Major commercial projects included:
- The $450 million EdgeCloudLink data center in Houston.
- The $410 million GFT Hotel in Arlington, Texas.
The largest institutional projects to enter planning included:
- The $300 million Kellogg School Building at Northwestern University in Evanston, Illinois.
- The $270 million Primrose School of Stevens Ranch in San Antonio, Texas.
