Nonresidential project planning climbs 51% and points to growth in 2027
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When the Dodge Momentum Index showed a 51 percent gain in construction planning over the past 12 months it marked a significant shift in the nonresidential market. The growth suggests that by late 2026 or early 2027 contractors may see a wave of projects finally break ground.
Momentum builds across commercial and institutional sectors
August planning activity rose 7.5 percent from July, led by an 8.7 percent increase in commercial planning and a 5.4 percent rise in institutional activity such as healthcare and education projects. The year‑to‑date pipeline now sits 30 percent higher compared to the same period in 2024.
Commercial planning has climbed 38 percent year over year while institutional planning surged 84 percent. Excluding data center projects, commercial planning remains up 38 percent, driven by strength in warehouses and automotive programs.
Data centers hotels and warehouses drive growth
Specific commercial categories are powering the rise in planning. Data centers feature prominently, alongside growing activity in warehouses and hotels. Developers appear more willing to accept higher costs amid lingering inflation and tariff uncertainty.
The institutional side also saw strong gains. Large public building projects such as detention facilities and court complexes accounted for much of the rise in planning. Education and healthcare planning slowed slightly compared to last month but remained firmly positive.
Major projects enter the queue
August saw 51 new projects valued at $100 million or more enter planning. Among commercial entrants were a $500 million data center and battery campus in Billings Montana, a $360 million Prologis Concorde data center in Sterling Virginia and a $347 million government complex in North Carolina.
Institutional projects included a $490 million judicial center in Colorado, a $375 million dormitory within a medical education complex in San Antonio, and a $360 million renovation at a correctional institution in Massachusetts.
Forward view hinges on economic confidence and costs
According to Sarah Martin associate director of forecasting at Dodge Construction Network the sustained planning surge points to stronger construction activity by late 2026 or early 2027. It follows a period of uncertainty related to tariffs and cost fluctuations.
Despite optimism elevated fiscal and economic volatility may still trigger swings in planning activity. But for now the pipeline looks robust particularly in sectors tied to digital infrastructure logistics and hospitality.
Impacts on the construction industry landscape
The uptick in planning offers opportunity across the full project lifecycle. Architects and engineers may see early engagement in program development feasibility and permitting. Trade contractors in civil work foundations MEP systems and specialty finishes will likely benefit from multi‑year delivery windows.
The rise in large institutional and public projects will demand capacity for complex phasing coordination will call for firms skilled in maintaining operations during construction. Developers and contractors that align with forward‑looking sectors like data centers and warehousing may capture outsized market share during this cycle.
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