The FMI Nonresidential Construction Index Report (NRCI) for Q4 2015 says that nonresidential construction is experiencing a slowdown. The NRCI dropped four points to 59.5, the lowest score since Q4 in 2013.
Panelists displayed a declining outlook for the overall economy, which was down 12.3 points to 58.3 from Q3. The report found that the expectations of activity in economic sector and the expected change in backlog scores also fell, and the cost of construction material rose.
“Economic recovery momentum is losing steam and rising costs in labor and materials start to put a load on the industry,” Chris Daum, President and CEO of FMI, said in a statement. “Next year will likely be more challenging for industry growth than 2015. Firms that excel at recruiting and training the most skilled workforce will have a strategic edge in the marketplace.”
Key takeaways in the Q4 NRCI:
· The overall economy where panelists do business is down. Panelists’ business is slowing down with a grim outlook of the overall economy.
· Panelists’ construction business is slipping. Although the panelists’ expectation of their construction activities slipped by 5.8 points to 69.9, it shows residual recovery momentum.
· There is an expected drop in backlog. The measure of expected change in backlog dropped to 62.2 from last quarter’s 68.2, a median of the past 12 months.
· The cost of construction materials and labor is rising. The cost of labor and materials continues to go higher. Generally, it is expected that costs will rise as business improves, thus holding down the overall NRCI index number.
Related Stories
High-rise Construction | Apr 23, 2015
Size matters in NYC, where several projects vie for the city’s tallest building honor
The latest renderings of 217 West 57th Street show a tower that would rise higher than the World Trade Center’s pinnacle, when elevations are included.
Multifamily Housing | Apr 22, 2015
Condo developers covet churches for conversions
Former churches, many of which are sitting on prime urban real estate, are being converted into libraries, restaurants, and with greater frequency condominiums.
Green | Apr 22, 2015
AIA Committee on the Environment recognizes Top 10 Green Projects
Seattle's Bullitt Center and the University Center at The New School are among AIA's top 10 green buildings for 2015.
BIM and Information Technology | Apr 21, 2015
Software tools shouldn't dictate the AEC process
With over 200 solutions on the market, construction software is one of the most complex and fragmented markets, writes Gensler's Mark Thole.
Contractors | Apr 20, 2015
Too many construction projects don’t meet owners’ expectations: KPMG report
Causes for delays, overruns, and underperformance include project management talent shortages, distrust between owners and contractors, and the lack of fully integrated project management systems.
High-rise Construction | Apr 17, 2015
Construction begins on Goettsch Partners-designed Nanning China Resources Center Tower
The tower's design is derived from its multiple uses, which include 170,000 sm of Class A office space, 5,000 sm of boutique retail, and a 45,000-sm luxury Shangri-La hotel.
High-rise Construction | Apr 16, 2015
Construction begins on Seattle's Tibet-inspired Potala Tower
Construction on the 41-story Potala Tower in Seattle finally kicked off following a ground-breaking ceremony seven months ago.
Building Team Awards | Apr 10, 2015
14 projects that push AEC teaming to the limits
From Lean construction to tri-party IPD to advanced BIM/VDC coordination, these 14 Building Teams demonstrate the power of collaboration in delivering award-winning buildings. These are the 2015 Building Team Award winners.
Building Team Awards | Apr 10, 2015
Prefab saves the day for Denver hospital
Mortenson Construction and its partners completed the 831,000-sf, $623 million Saint Joseph Hospital well before the January 1, 2015, deadline, thanks largely to their extensive use of offsite prefabrication.
Building Team Awards | Apr 10, 2015
Anaheim’s soaring intermodal hub
Anaheim's Regional Transportations Intermodal Center is the largest ETFE project in North America.
