Leading Construction Indicator Signals Data Center Buildout Tsunami Nears

The Dodge Momentum Index (DMI), a leading indicator of US non-residential construction, rose 3% in September, signaling ongoing strength. Year-over-year, the DMI surged 60%, driven by institutional and commercial projects, especially data centers. Goldman Sachs analysts observed a divergence between DMI and the Architecture Billings Index (ABI), which weakened, suggesting contrasting architectural activity. This divergence stems from large-scale data center and public sector projects dominating construction. The DMI predicts groundbreaking for many planned data center projects will occur in 2026. UBS analysts forecast a construction boom in AI data centers impacting the economy next year, followed by reacceleration in construction spending in the second half of 2026. This upswing will create a critical economic tailwind. The Trump administration could benefit during the 2026 midterm elections.