For the fourth consecutive quarter, the FMI Nonresidential Construction Index (NRCI) increased over the preceding quarter. The third quarter 2013 index was at 60.3, up from 54.8 during the third quarter of 2012 and at its highest point since the inception of the NRCI index in 2007. For reference, any score above 50 indicates expansion and any score below 50 indicates contraction. Respondents feel that areas such as the overall economy, construction business and backlog are taking a positive turn.
Challenges Facing the Construction Industry
Although there has been an increase in the index for four consecutive quarters, there are still three components preventing a faster rise: cost of materials, cost of labor, and overall productivity, although these components are in line with other industries nationwide. Also tempering growth is the reluctance of business owners to make any large investments due to the uncertainty in the economy caused by immigration/labor bills, the delay in implementation of Obamacare and the impact of residential growth on nonresidential construction.
For more insight into the current state of the construction industry, read the full FMI 2013 NRCI 3rd Quarter Report here.