Q2 2024: Industry

According to Richard Branch, Chief Economist for Dodge Construction Network, the first federal interest rate cut is projected for September 2024 which will provide project confidence and stability in the upcoming summer months for the construction sector. [1]

The total DMI* for April 2024 rose 6% from March and rebounded from a drop earlier this year in Q1. Data centers and major infrastructure construction have been driving this increase. Outside of major infrastructure, construction firms have still been delaying decisions to push projects into the planning cue until they have a more confident outlook on the US economy. An interest rate decrease will lead to construction project growth. [2]

The American Institute of Architects published their latest ABI* score for May, 2024 which shows a score increase from March, but design activity is still considered sluggish as billings continue to decline at most architecture firms. [3]

This chart shows an increase in the total construction spending in the US from May ’23 to April ‘24. [4]

* The DMI is a monthly measure of the value of nonresidential building projects going into planning, shown to lead construction spending for nonresidential buildings by a full year.

* The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients.

[1] Dodge Construction Network. (2024, May 16). Construction starts - April 2024. YouTube. https://www.youtube.com/watch?v=dTgvpPiDGAk 

[2] Roepke, A. (2024, May 7). Dodge momentum index rose 6% in April. Dodge Construction Network. https://www.construction.com/company-news/dodge-momentum-index-rose-6-in-april/ 

[3] AIA/Deltek Architecture Billings index reflects another decline in April. The American Institute of Architects. (2024, May 22). https://www.aia.org/about-aia/press/aiadeltek-architecture-billings-index-reflects-another-decline-april-0 

[4] Total construction spending: Total construction in the United States. FRED Economic Data. (2024, June 3). https://fred.stlouisfed.org/series/TTLCONS