Strip the data centers out of the numbers and commercial construction planning in the United States is down nearly 15% from a year ago.
That is the finding buried in the Dodge Momentum Index for September, released Oct. 7 by Dodge Construction Network. The headline reading was positive: the index rose 2.4% to 288.0 from a downwardly revised August level of 281.3. But the composition shifted sharply, and the engine that has driven nonresidential building for two years stalled.
Commercial planning fell 1.3% over the month. Institutional planning rose 9.4%. Year over year, the overall index was up 3.7% against September 2025, with the institutional portion up 17.2% and the commercial portion down 3.0%. Excluding data centers, Dodge said, the commercial segment would be down 14.9% from year-ago levels, a gap it attributed to the surge in activity seen in late 2025.
“Institutional planning led this month’s growth, alongside a strong uptick in education, healthcare, and government building planning,” said Sarah Martin, director of economic research at Dodge Construction Network. “Milder growth was seen across several other commercial sectors, as well. As steady growth resumes across most nonresidential sectors, construction spending in those sectors should see a marginally stronger late 2027.”
What the index measures, and why the lag matters
The DMI tracks the three-month moving value of nonresidential building projects entering the planning stage. Dodge describes it as leading construction spending for nonresidential buildings by a full year to 18 months. It is not a measure of work underway; it is a measure of what owners are paying architects and engineers to design.
That lag is the reason the September composition matters more than the September level. A project entering planning now reaches the ground in late 2027 or 2028. The index is a statement about what contractors, lenders and developers will be competing for two years out β and this month it says the mix of that work is changing.
The data center plateau
Data centers did not disappear from the pipeline. September’s largest commercial projects to enter planning were all data centers: a $480 million project called Project North in Jermyn, Pa., and two $473 million facilities, EDCAUS15 and EDCAUS16, in Bastrop, Texas.
What changed is the rate of growth. Dodge said commercial planning strengthened across retail stores, hotels, office buildings and parking garages during the month, but that the gains were more than offset by slower momentum in data center and warehouse planning. Those two categories have carried the commercial side of the index; when they decelerate, the rest of the commercial pipeline is exposed, and the ex-data-center figure of minus 14.9% shows what that looks like.
The deceleration also reflects the comparison base. Late 2025 produced an extraordinary volume of data center planning, which RealtyWire has tracked through a string of record readings β including June’s one-month record $100.3 billion in nonresidential starts and Dodge’s forecast that data centers would account for $77.4 billion of 2026’s $78 billion commercial construction gain. Measured against that base, flat is a decline.
Hospitals and schools pick up the slack
The institutional side did the work in September. Education, healthcare and public building planning all grew strongly, according to Dodge, and the three largest institutional projects entering planning were hospitals: a $346 million addition at Duke Raleigh Hospital in Raleigh, N.C., the $325 million Spartanburg Regional Heart & Vascular Hospital in Spartanburg, S.C., and a $319 million WakeMed Hospital in Wendell, N.C.
Across both segments, 45 projects valued at $100 million or more entered planning during the month.
The concentration in the Carolinas is notable but probably coincidental; health systems plan capital programs on multi-year cycles that do not align with monthly data. The more durable point is that institutional demand is counter-cyclical in a way commercial demand is not. Hospitals and school districts fund construction through bonds, state appropriations and operating revenue rather than through the private credit markets that price off Treasury yields β and with the 10-year Treasury above 5% and the 30-year mortgage rate at a near three-year high, that distinction has teeth.
Reading the two Dodge series together
The planning index and Dodge’s construction starts series have been telling complementary stories. Starts fell 24.8% in August as July’s megaproject surge unwound β the volatility that comes with a pipeline dominated by a handful of enormous projects. The DMI smooths that out with its three-month average, which is what makes the September composition shift legible rather than noise.
On our reading, the question for 2027 is whether institutional strength is large enough to replace data center growth rather than merely offset a single month of it. Institutional planning up 17.2% year over year is real, but the commercial segment ex-data-centers is down almost 15%, and institutional building is generally smaller per project. One month does not settle it. Further commercial real estate coverage follows each monthly release.
Dodge Construction Network publishes the index monthly, with a base period of 2000 = 100.
