Nonresidential construction planning cooled in September after months of strong growth, according to Dodge Construction Network.
The Dodge Momentum Index, a benchmark that measures nonresidential construction planning, decreased 4.2% in September due to a drop in commercial projects, according to the report.
Commercial planning, which includes office, industrial and hotel projects, declined 7.8%, while institutional planning, which spans education, life sciences and healthcare projects, increased 5.2%, according to the report.
Although overall planning ticked down in September, the Dodge Momentum Index suggests continued strength in key sectors, said Sarah Martin, associate director of forecasting at Dodge Construction Network.
“Despite this month’s decline, the Dodge Momentum Index remains at very robust levels,” said Martin. “A surge in data center activity drove much of the recent rapid growth in the DMI, so as planning for that sector moderated over the month, overall commercial planning fell back.”
Commercial planning tumbled in September after positive momentum in recent months, particularly in the office, warehouse and retail sectors, according to the report. Hotel planning, on the other hand, continued its upward trend in September, marking five months of increased activity.
Planning in the education, healthcare and recreational sectors primarily drove growth on the institutional side, according to the report. Within that category, only religious project planning activity posted a decline in September, according to Dodge.
Nevertheless, Martin expects nonresidential construction planning to accelerate as financing conditions improve next year. By mid-2025, additional potential rate cuts should spur planning to reach groundbreaking sooner, she said.
From an annual perspective, the DMI remains 21% higher than in September 2023, according to the report. The commercial segment increased 31% from year-ago levels, while the institutional segment jumped 4% over the same period.
A total of 28 projects valued at $100 million or more entered planning during September. The largest commercial sector projects included:
- The $390 million Project Nova data center in Eagan, Minnesota.
- Phase 1 and 2 of the SNA data center in Cedar Rapids, Iowa — valued at $375 million per phase.
The largest institutional projects to enter planning included:
- The $300 million Kairos Power research and development lab facility in Albuquerque, New Mexico.
- The $215 million Phase 2 of the Kentucky Exposition Center redevelopment in Louisville, Kentucky.
