While most of the nonresidential construction sector remained subdued in April, the relentless demand for data centers continued to power planning activity across the U.S., according to the latest Dodge Momentum Index (DMI) report from Dodge Construction Network.

The DMI rose a modest 0.9% in April, a gain almost entirely fueled by the surge in data center planning. Dodge analysts warned that without the influx of data center developments, the index would have posted a 3% decline. The commercial sector would have dropped by 2.3%, and the institutional segment—covering projects such as schools, healthcare, and life sciences facilities—saw a 4.2% drop from the previous month.

“Despite an uptick in April, the bulk of the DMI’s growth was driven by a surge in data center planning, while momentum in other nonresidential sectors lagged behind,” said Sarah Martin, associate director of forecasting at Boston-based Dodge Construction Network. “Owners and developers are navigating heightened economic and policy uncertainty, which likely bogged down much of this month’s planning activity.”

The Dodge Momentum Index tracks the dollar value of nonresidential building projects that enter the early design phase each month. Because these projects typically lead to construction starts about a year later, the index is viewed as a forward-looking indicator of industry health.

This month’s gains are heavily skewed by data center developments, now the most aggressive sub-sector in construction due to insatiable demand from hyperscalers, AI computing needs, and increased cloud storage. Analysts point to tariffs, inflation, and unclear federal policy directions as reasons for widespread hesitation among developers in other market segments.

Still, despite these headwinds, the DMI was up 22% compared to April 2024—a sign that longer-term optimism remains. Year-over-year commercial planning was up 20%, and institutional project planning was 26% higher. However, Dodge cautioned that these gains are lopsided.

If data center plans that entered the pipeline since the beginning of 2023 were excluded, overall planning activity would have grown just 7% over the past year. The commercial sector, in particular, would be in the red, showing a 1% year-over-year decline without those projects.

April saw a total of 40 projects with estimated costs exceeding $100 million move into the planning phase. Among the most notable:

• The $1.9 billion TA Realty Data Center campus in Dulles, Virginia
• The $900 million Powhatan Data Center Campus in Powhatan, Virginia
• The $493 million Revere High School in Revere, Massachusetts
• The $350 million QTS Data Center DFW2-DC3 in Lancaster, Texas
• The $230 million Kaiser Permanente Sunnyside Medical Center Hospital Tower in Clackamas, Oregon
• The $203 million Kailua-Kona Hospital in Kaiminani, Hawaii

While data center projects now dominate headlines and industry dashboards alike, their outsized influence raises questions about the broader health of the construction sector. Dodge's report suggests that unless other sectors rebound, the industry may be heading toward an uneven and tech-dependent recovery.

“Owners and developers are navigating heightened economic and policy uncertainty, which likely bogged down much of this month’s planning activity,” Martin said, underscoring how fragile the recovery remains beyond the digital infrastructure boom.

Originally reported by Joe Bousquin in Construction Dive.