Further commercial real estate progress may occur in the United States during the next several months, as planned projects continue to pick up steam.
The Dodge Momentum Index rose to 128.7 in June 3.3 percent higher than May's level of 124.6, according to a report from McGraw Hill Construction. This was the third monthly gain in a row, and was significantly higher than the benchmark level of 100. The gain meant that there could be a boost in construction spending within the next year. May's level was also 22.6 percent higher than the same point in 2013.
For the commercial building measurement, the figure spiked to 144.6 in June, 8.3 percent higher than in May, when it was 133.5, the report noted. However, the institutional building reading fell to 109, 4 percent lower than May's figure of 113.5. Despite this, it was still well above the benchmark reading.
Architecture billings climb during May
While projections of future construction remained relatively positive, building design requests also showed improvement during the first half of the year. According to the Architecture Billings Index from the American Institute of Architects, building design requests rose to 52.6 in May, significantly improved from April's level of 49.6. This also helped the figure back into positive territory, as it rose higher than the benchmark of 50. When at or above that level, it notes that overall building design requests grew.
"Volatility continues to be the watchword in the design and construction markets, with firms in some regions of the country, and serving some sectors of the industry, reporting strong growth, while others are indicating continued weakness," said Kermit Baker, chief economist at AIA. "However, overall, it appears that activity has recovered from the winter slump, and design professions should see more positive than negative numbers in the coming months."
There also was a gain in the new projects inquiry index, as it improved to 63.2 in May, notably better than April's figure of 59.1, even though both were well above the threshold, the report showed. The design contracts index was also in positive territory, as it rose to 52.5.
Three of the four sectors measured were in positive range in May. The report added that multifamily residential posted a figure of 58.2, while commercial/industrial was at 53.6. Mixed practice also reached positive levels, as it was at 50.4.