The overall economy, as well as the economy in which they do business, might be down, but contractor panelists who provided these insights still see nonresidential construction on the upswing, according to FMI’s Second Quarter Nonresidential Construction Index (NRCI) Report.
Raleigh, N.C.-based FMI provides management consulting, investment banking, and people development services. Its quarterly index is based on voluntary responses from panelists to a 10-minute survey. The respondents represent a fairly wide cross-section of trades, company sizes, and markets. About 15% of the respondents are national contractors, 56% are Commercial General Building Contractors, and 39% operate businesses that generate between $51 million and $200 million in annual revenue. FMI declined to provide the number of panelists surveyed.
Chart: FMI
The NRCI for the second quarter was 64.9, virtually unchanged from the first quarter but improved from the 62.8 Index in the second quarter of 2014. FMI states that scores above 50 indicate expansion.
The panelists’ business outlook for specific nonresidential sectors is more ambivalent, however. Indices for healthcare and office construction are up, compared to a year ago, but down (albeit still on the growth side) for education, lodging, and manufacturing.
These scores might reflect the panelists’ perceptions of a still-volatile overall economy, whose second-quarter Index of 76.9 is down from the 78.8 Index in the first quarter. The panelists report that their own markets’ economies are off, too.
On the other hand, the panelists report improving productivity and steady backlogs. Half of the panelists said that their second-quarter backlogs grew faster than the previous quarter.
The indices for costs of materials and labor are down from the previous quarterly and yearly measurements, meaning those costs are rising. The NRCI Index for Construction Materials stood at 21.4, and 58.1% of the panelists said their materials costs increased from the first quarter. The Labor Cost Index was at 12.5, with 75% of the panelists reporting that their labor costs were higher in the second quarter than the first.
Chart: FMI
The survey also found that:
• Green construction made up only 28.6 percent of the panelists’ second-quarter backlogs, on average. FMI concludes from this finding that contractors no longer see green as anything special because it has become engrained into the mainstream of their businesses.
• The expediency of certain delivery methods during the recession is slowly yielding to more collaborative approaches among Building Teams and owners. “CM at-Risk is now allowed by most states, but those building CM at-Risk projects won’t quickly move to IPD [integrated project delivery].” FMI writes. “Design-build and IPD are expected to be growth areas for delivery methods; but IPD in particular, even though it offers many benefits to all parties, is not for everyone at this time. IPD, and even what has been called IPDish, requires more sophisticated owners, designers and contractors in order to realize the full benefits of this delivery approach.”
• Based on the panelists’ responses, FMI notes that other trends in construction—such as prefabrication, modularization, use of robotics, and 3D printing—are also likely to take a longer time to become mainstream like green construction has. “But the ongoing shortages of skilled labor will certainly hasten their coming.”
Related Stories
University Buildings | Jun 28, 2024
The American University in Cairo launches a 270,000-sf expansion of its campus in New Cairo, Egypt
In New Cairo, Egypt, The American University in Cairo (AUC) has broken ground on a roughly 270,000-sf expansion of its campus. The project encompasses two new buildings intended to enhance the physical campus and support AUC’s mission to provide top-tier education and research.
MFPRO+ New Projects | Jun 27, 2024
Chicago’s long-vacant Spire site will be home to a two-tower residential development
In downtown Chicago, the site of the planned Chicago Spire, at the confluence of Lake Michigan and the Chicago River, has sat vacant since construction ceased in the wake of the Great Recession. In the next few years, the site will be home to a new two-tower residential development, 400 Lake Shore.
Codes and Standards | Jun 27, 2024
Berkeley, Calif., voters will decide whether to tax large buildings with gas hookups
After a court struck down a first-in-the-nation ban on gas hookups in new buildings last year, voters in Berkeley, Calif., will have their say in November on a measure to tax large buildings that use natural gas.
Mass Timber | Jun 26, 2024
Oregon State University builds a first-of-its-kind mass timber research lab
In Corvallis, Oreg., the Jen-Hsun Huang and Lori Mills Huang Collaborative Innovation Complex at Oregon State University aims to achieve a distinction among the world’s experimental research labs: It will be the first all-mass-timber lab meeting rigorous vibration criteria (2000 micro-inches per second, or MIPS).
Student Housing | Jun 25, 2024
P3 student housing project with 176 units slated for Purdue University Fort Wayne
A public/private partnership will fund a four-story, 213,000 sf apartment complex on Purdue University Fort Wayne’s (PFW’s) North Campus in Fort Wayne, Indiana. The P3 entity was formed exclusively for this property.
Sustainability | Jun 24, 2024
CBRE to use Climate X platform to help clients calculate climate-related risks
CBRE will use risk analysis platform Climate X to provide climate risk data to commercial renters and property owners. The agreement will help clients calculate climate-related risks and return on investments for retrofits or acquisitions that can boost resiliency.
MFPRO+ News | Jun 24, 2024
‘Yes in God’s Backyard’ movement could create more affordable housing
The so-called “Yes in God’s Backyard” (YIGBY) movement, where houses of worship convert their properties to housing, could help alleviate the serious housing crisis affecting many communities around the country.
Student Housing | Jun 20, 2024
How student housing developments are evolving to meet new expectations
The days of uninspired dorm rooms with little more than a bed and a communal bathroom down the hall are long gone. Students increasingly seek inclusive design, communities to enhance learning and living, and a focus on wellness that encompasses everything from meditation spaces to mental health resources.
Museums | Jun 20, 2024
Connecticut’s Bruce Museum more than doubles its size with a 42,000-sf, three-floor addition
In Greenwich, Conn., the Bruce Museum, a multidisciplinary institution highlighting art, science, and history, has undergone a campus revitalization and expansion that more than doubles the museum’s size. Designed by EskewDumezRipple and built by Turner Construction, the project includes a 42,000-sf, three-floor addition as well as a comprehensive renovation of the 32,500-sf museum, which was originally built as a private home in the mid-19th century and expanded in the early 1990s.
Building Technology | Jun 18, 2024
Could ‘smart’ building facades heat and cool buildings?
A promising research project looks at the possibilities for thermoelectric systems to thermally condition buildings, writes Mahsa Farid Mohajer, Sustainable Building Analyst with Stantec.