Dodge Sees Signs of Slowing, Wells Fargo More Optimistic

According to the most recent report from Dodge Data & Analytics, the Dodge Momentum Index lost 4.4 percent in February, falling to 146.9 from 153.6 in January. Both components of the index fell in February. The institutional component was down 5.9 percent, and the commercial component was down 3.4 percent.

According to the Momentum Index report, it has "become clear that the average level of activity has downshifted slightly since the summer of 2018. From April through August last year, the average level of the Momentum Index was 158.6, while from September through the latest month the average is 150.3—a decline of 5.2 percent. The shift continues to suggest that the growth in construction activity will moderate over the coming year."

However, a new Wells Fargo report, "Construction Industry Forecast 2019," is a bit more optimistic, noting a healthy level of optimism among construction executives for 2019. The report, which has been published each year for the last eight years, suggests non-residential construction should see strong activity in 2019.

In specific, according to the Wells Fargo report, 98 percent of contractors who participated in the survey plan to purchase new or used equipment this year. For 76 percent of this group, their new equipment purchases will increase from 2018, and for 75 percent of respondents, purchases of used equipment will either increase or remain steady compared with last year.

In terms of equipment rental activity, 92 percent of contractors surveyed reported that they plan to increase or maintain their current level of equipment rental activity.

As regards 2019 projections in general, 52 percent of respondents predicted an overall increase in industry activity, while only 4 percent predicted that activity would decrease this year.

When it comes to 2020, however, responses were different, with 51 percent of contractors expecting continued expansion but 27 percent predicting a contraction next year.

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