The nonresidential construction sector continues at a steady pace despite a slight decline, according to the FMI Nonresidential Construction Index Report (NRCI) for Q3 2015. The index reflects the observations of a sample of the nation's construction industry executives.
FMI’s NRCI for Q3 2015 dropped 1.3 points to 63.6 from the previous reading of 64.9 in Q2. While the NRCI component for the overall economy dropped 6.3 points to 70.6 points this quarter, which is down from its peak, this component still indicates that panelists remain bullish about the economy.
Similarly, indicators for the economies where panelists do the most business stood at 73.3, indicating a strong outlook despite a slight 3.4 points slip from last quarter.
Highlights from the NRCI point to diverse forces driving the industry as we enter the last quarter of the year:
- Panelists’ Construction Business. Panelists’ views on their businesses are solidly positive with little changed from the last quarter.
- Nonresidential Building Construction Market. Although the nonresidential building construction market where panelists do business slipped 1.4 points to 75.0, this NRCI component remains in the optimistic range.
- Expected Change in Backlog. The measure of expected change in backlog dropped 3.1 points this quarter to reach 68.8, while current backlog remains at a solid 10 months.
- Cost of Construction Materials and Labor. The cost of labor continues to rise, though not greatly changed from the last quarter, at 12.5. Materials costs continue to be high, but slightly lower than last quarter. Both labor and material costs act to hold down the overall NRCI as costs increase.
- Productivity Low. The productivity component stands at 47.6, the lowest since 2008. Executives surveyed report difficulties in maintaining productivity while squeezed by rising material and labor costs.
International Debt Impacts
The NRCI Q3 report tallies executives’ opinions on the potential impact of the Greek debt crisis on their businesses. A third of respondents indicated no immediate or long-term impact was likely for their businesses, 25% were unsure and only 2% surveyed expected they would have to adjust their strategic plans to deal with the uncertain economy.
Business Changes Since Recession
All sectors within the construction industry continue their recovery since the financial crisis, as companies make adjustments to their businesses in the intervening recession. The NRCI Q3 report summarizes how business adapted during the recession. Among the strategies employed, greater selectivity regarding projects and clients tops the list, followed closely by greater use of technology for their businesses to drive productivity, stronger risk management, heightened productivity, and incorporating global geopolitical and economic conditions in decision making.
The full report is available here.
Related Stories
Green | Jan 17, 2023
Top 10 U.S. states for green building in 2022
The U.S. Green Building Council (USGBC) released its annual ranking of U.S. states leading the way on green building, with Massachusetts topping the list. The USGBC ranking is based on LEED-certified gross square footage per capita over the past year.
AEC Tech Innovation | Jan 14, 2023
CES recognizes a Dutch firm’s wearable technology for construction management
The firm’s TokenMe product offers construction managers a real-time crowd- and asset-tracking solution via low-power, location-aware radio and RFID tags and multiple sensors through which data are processed with cloud-based artificial intelligence.
Market Data | Jan 10, 2023
Construction backlogs at highest level since Q2 2019, says ABC
Associated Builders and Contractors reports today that its Construction Backlog Indicator remained unchanged at 9.2 months in December 2022, according to an ABC member survey conducted Dec. 20, 2022, to Jan. 5, 2023. The reading is one month higher than in December 2021.
Religious Facilities | Jan 9, 2023
Santiago Calatrava-designed St. Nicholas Greek Orthodox Church opens in New York
In December, New York saw the reopening of the new St. Nicholas Greek Orthodox Church and National Shrine—the only religious structure destroyed on 9/11. Renowned architect and engineer Santiago Calatrava designed St. Nicholas Church to address the traditional Greek Orthodox liturgy while honoring the Church’s connection with the World Trade Center Memorial site.
Sustainability | Jan 9, 2023
Innovative solutions emerge to address New York’s new greenhouse gas law
New York City’s Local Law 97, an ambitious climate plan that includes fines for owners of large buildings that don’t significantly reduce carbon emissions, has spawned innovations to address the law’s provisions.
Fire and Life Safety | Jan 9, 2023
Why lithium-ion batteries pose fire safety concerns for buildings
Lithium-ion batteries have become the dominant technology in phones, laptops, scooters, electric bikes, electric vehicles, and large-scale battery energy storage facilities. Here’s what you need to know about the fire safety concerns they pose for building owners and occupants.
Market Data | Jan 6, 2023
Nonresidential construction spending rises in November 2022
Spending on nonresidential construction work in the U.S. was up 0.9% in November versus the previous month, and 11.8% versus the previous year, according to the U.S. Census Bureau.
Industry Research | Dec 28, 2022
Following a strong year, design and construction firms view 2023 cautiously
The economy and inflation are the biggest concerns for U.S. architecture, construction, and engineering firms in 2023, according to a recent survey of AEC professionals by the editors of Building Design+Construction.
Contractors | Dec 27, 2022
McHugh Construction, headquartered in Chicago, celebrates its 125th anniversary
McHugh Construction, Chicago, celebrates its 125th anniversary, December 8, 2022.
University Buildings | Dec 22, 2022
Loyola Marymount University completes a new home for its acclaimed School of Film and Television
California’s Loyola Marymount University (LMU) has completed two new buildings for arts and media education at its Westchester campus. Designed by Skidmore, Owings & Merrill (SOM), the Howard B. Fitzpatrick Pavilion is the new home of the undergraduate School of Film and Television, which is consistently ranked among the nation’s top 10 film schools. Also designed by SOM, the open-air Drollinger Family Stage is an outdoor lecture and performance space.
