The Dodge Momentum Index (DMI) fell 1.3 percent in June to a reading of 118.3, the second straight monthly decline. Weakness was concentrated in the commercial sector, while institutional rose during the month.
Commercial Sector Weighs Down Headline
_Reflecting a soft commercial sector, planning for nonresidential building projects has posted weak readings in three of the past four months. On the other hand, institutional building planning is steadily strengthening and is up 10.1 percent from a year earlier. DMI is used as a forward-looking indicator for private nonresidential construction spending and suggests weakness is looming.
Projected Commercial Completions More Hopeful
_Commercial construction, which includes retail, office, hotels, garages and warehouse, comprises a sizable portion of private nonresidential construction spending. An impending slowdown in this component could be disconcerting. In the release, Dodge Data & Analytics suspects that economic weakness from the first quarter is likely still playing a role. Fundamentals are supportive of continued improvement in the sector through 2016.