Wednesday, July 8, 2026

Executive snapshot

• Neutral The data is split: Dodge starts surged 34% in May (to $1.78T SAAR) even as the ABI slid to 44.5 — hard current activity is strong while the forward design pipeline weakens, so read momentum by sector, not the headline. Dodge Construction Network
• Positive Cost backdrop stays calm: steel eased -0.78% MoM, construction materials were flat (-0.03%), and inputs to construction rose just +0.25% — no broad cost shock, keeping escalation risk manageable on near-term bids. BLS PPI
• Positive Columbus is a supply-constrained standout: Q2 net absorption hit 3.3M SF with vacancy near 5.0% and only 17% of the 16.2M SF pipeline available to lease — landlords hold pricing power in one of the Midwest's strongest markets. MLAW Real Estate
• Cautious Ohio's grid rules are reshaping demand: a PUCO settlement forcing data centers to pay for 85% of requested energy cut AEP Ohio's pipeline from 30 GW to 13 GW — a real signal that speculative load is being disciplined into firm commitments. DataCenterDynamics
• Neutral Envelope costs stay range-bound: installed TPO/single-ply roofing runs roughly $5.50-9.50/SF (most projects $6.50-8.50), with the global single-ply membrane market set to grow ~4.8% a year — steady, not spiking, input pressure on big-box enclosures. Veteran Roofing Systems
• Deteriorating Demand-side softness deepens: the ABI sat at 44.5 in May with design contracts at 45.0 — a leading signal of a thinner nonresidential pipeline 9-12 months out, arguing for backlog reweighting toward power and industrial. AIA/Deltek ABI
• Cautious Residential pulse holds flat: permits at 1.413M and single-family starts at 886K SAAR show a steady but unremarkable housing market as diesel eases to $4.67/gal and material costs stay contained. US Census NRC

Market movers

Sector outlooks

Strategic watchlist

• Ohio's 85% minimum-billing rule: PUCO's data-center energy settlement already halved AEP Ohio's speculative pipeline (30 GW to 13 GW) — watch whether other states copy it, disciplining speculative load into firm, financeable commitments. DataCenterDynamics
• The Dodge-vs-ABI divergence: starts surged 34% while billings fell to 44.5 — watch whether the current-activity strength is a nonbuilding one-off or whether the design pipeline stabilizes to sustain 2027 starts. AIA/Deltek ABI
• Columbus supply thinning: with only 17% of the 16.2M SF pipeline available and 28% build-to-suit for Intel/Meta/Anduril, watch for a mid-size tenant space crunch and continued rent growth into 2027. MLAW Real Estate
• Envelope input trend: the single-ply membrane market is set to grow ~4.8% annually — watch polyiso and metal-panel pricing, the true swing factors on big-box and data-center roof budgets. IndexBox

Top questions leaders should be asking

• With Dodge starts up 34% but the ABI at 44.5, which of our sectors are riding real current demand versus a design pipeline that is thinning into 2027?
• If Ohio's 85% minimum-billing rule spreads, how does that change the financeability and timing of the data-center work in our backlog?
• In a Columbus-type supply-constrained market (5% vacancy, 17% pipeline available), should we lock space or land basis now before rents run further?
• With diesel down to $4.67 and steel easing, where can we sharpen bids to win share without giving back margin?
• How do we underwrite roofing/envelope escalation given steady ~4.8% membrane-market growth but volatile polyiso and metal-panel inputs?