Nonresidential Construction Index Drops


December 2, 2013 – FMI’s 2013 Fourth Quarter Nonresidential Construction Index (NRCI) shows a 2.9 point drop in to 57.4. However, the score is still ahead of fourth quarter 2012 by 1.9 points. An NRCI of more than 50 indicates growth therefore the fourth quarter score still indicates modest improvement in the industry. One of the reasons cited for the slight decline is the recent political infighting and uncertainty in Washington, DC. Proceeding with caution by investors seems to be the new norm. Productivity continues to slide. The 48.6 score is at its lowest since the second quarter of 2008. Ultimately, attention to productivity and profit margins will be key to sustaining growth going forward. Building construction continues to improve since 2012. However, growth is still unsteady as the numbers have slipped 7.5 points to 64.1 this quarter. Material and labor cost also continues to rise which causes the overall NRCI to fall.

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