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
K-12 Schools | Feb 26, 2015
D.C.'s Dunbar High School is world's highest-scoring LEED school, earns 91% of base credits
The 280,000-sf school achieved 91 points, out of 100 base points possible for LEED, making it the highest-scoring school in the world certified under USGBC’s LEED for Schools-New Construction system.
K-12 Schools | Feb 25, 2015
Polish architect designs modular ‘kids city’ kindergarten using shipping container frames
Forget the retrofit of a shipping container into a building for one moment. Designboom showcases the plans of Polish architect Adam Wiercinski to use just the recycled frames of containers to construct a “kids city.”
Building Team | Feb 24, 2015
Call for entries: 2015 Giants 300 survey
The annual Giants 300 Report ranks the top AEC firms in commercial construction, by revenue.
Industrial Facilities | Feb 24, 2015
Starchitecture meets agriculture: OMA unveils design for Kentucky community farming facility
The $460 million Food Port project will define a new model for the relationship between consumer and producer.
Contractors | Feb 24, 2015
ABC economist: Year-end construction backlog drops 1%, but still outpaces 2013
Despite a quarter-over-quarter decline, the U.S. construction backlog ended the year at 8.7 months, 4.4% higher than one year ago.
University Buildings | Feb 23, 2015
Future-proofing educational institutions: 5 trends to consider
In response to rapidly changing conditions in K-12 and higher education, institutions and school districts should consider these five trends to ensure a productive, educated future.
Office Buildings | Feb 23, 2015
The importance of quiet and the consequences of distraction
Recent work style studies show that the average knowledge worker spends 25-35% of their time doing heads-down focused work. Once thrown off track, it can take some 23 minutes for a worker to return to the original task.
BIM and Information Technology | Feb 23, 2015
9 best practices for effective laser scanning
JE Dunn’s National BIM Director, Trent Nichols, offers tips and advice for mastering the art of laser scanning.
Modular Building | Feb 23, 2015
Edge construction: The future of modular
Can innovative project delivery methods, namely modular construction, bring down costs and offer a solution for housing in urban markets? FXFOWLE’s David Wallance discusses the possibilities for modular.
Contractors | Feb 23, 2015
Rising Nonresidential Construction Index comes with struggles, FMI reports
Construction companies face the challenge of having enough people to keep up with increasing backlogs.
