Construction planning slowed for the second consecutive month in November, even as developers continue to advance major data center and healthcare projects that are reshaping the national pipeline, according to a new Dodge Construction Network report.
The Dodge Momentum Index, a leading indicator that measures nonresidential projects entering the earliest planning stages, fell 1.1% for the month. Commercial planning dipped only slightly at 0.1%, while institutional planning — including education, civic, and healthcare work — posted a sharper 3.4% decline.
Despite the pullback, Dodge emphasized that overall activity remains historically strong. Year-to-date, the index sits 36% above its average level over the same period in 2024, a trend driven overwhelmingly by massive data center and healthcare development.
“The influx of high-value data center work, compounded by inflationary cost pressures, continues to support elevated DMI levels,” said Sarah Martin, associate director of forecasting at Dodge Construction Network. “Overall, nonresidential construction is expected to strengthen in 2027, led primarily by data center and healthcare projects.”
Martin has cautioned in recent months that the industry should still expect softer demand across several categories next year. Rising financing costs, construction inflation, and broader macroeconomic uncertainty are weighing on many developers — particularly in sectors that do not benefit from hyperscale computing growth or ongoing healthcare modernization.
In commercial construction, planning activity weakened for warehouse and hotel work in November. Traditional office and retail planning remained more stable, though both categories continue to operate far below pre-pandemic norms.
Institutional planning also lost momentum after several months of robust growth. While most segments slowed, Dodge noted improved activity for religious-related construction — a rare bright spot in a sector dominated by budget constraints and shifting demographic needs.
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Year-over-year, however, the strength of the data center boom is evident. Compared to November 2024, the overall index surged 50%, with commercial planning up 57% and institutional work up 37%. Dodge noted that excluding data centers would drop commercial growth to 36%, still strong but far less explosive.
Developers submitted 28 projects valued at $100 million or more into planning in November. Data centers were the most prominent drivers, including:
Large institutional projects also moved forward, reinforcing long-term public-sector and community investment, such as:
Even with November’s dip, Dodge’s outlook signals a fundamentally strong long-term picture, particularly as data center demand accelerates in response to AI, cloud computing, and digital infrastructure needs. The healthcare sector is also expected to remain a stabilizing force for nonresidential construction, with major hospital and outpatient expansions underway across the country.
But other commercial markets — especially hotels, warehouses, and some institutional categories — are likely to feel the brunt of financing challenges in 2026, even as megaprojects keep the overall index elevated.
Originally reported by Sebastian Obando in Construction Dive.
